The Hindu Business Line : Numaligarh Refinery to set up hydro-cracker, hydrogen unit

Higher margin
Detailed feasibility report expected next month, pre-feasibility report over.
Unit will help NRL extract higher refining margin; enhance capacity utilisation up to 110 per cent.
Rs 290-cr motor spirit unit to start production next month.

Kolkata , April 3

Numaligarh Refinery Ltd (NRL), a BPCL subsidiary, is planning to set up a hydro-cracker and hydrogen unit to enhance production of Euro-III fuel and high-end distillates.

The over Rs 300-crore proposed project would also help the company to improve capacity utilisation.

The pre-feasibility study is over and the detailed feasibility report (DFR) is expected next month.

The DFR on capacity augmentation from three to 4.5 mt is also expected next month.

NRL currently utilises a little over 70 per cent of its rated capacity.

Apart from crude availability, low rate of crude cut resulting into production of very high percentage of heavy end products restricts the company from improving capacity utilisation.

According to company sources, the unit if implemented will help NRL extract higher refining margin as well as enhance capacity utilisation up to 110 per cent.

Meanwhile, the Rs 290-crore project for producing 167 thousand tonne Euro-III motor spirit (MS) is expected to commence commercial production next month. NRL previously had a negligible five thousand tonne MS production capacity. The project is expected to boost capacity utilisation to over 80 per cent.

"The motor spirit production facility would impact the profit after tax by close to Rs 100 crore," a company official said. NRL posted a net profit of Rs 409 crore in 2004-05 and is expected to register a 10 per cent drop in 2005-06.

The refining margin will also fall short of $5.35 a barrel it recorded in 2004-05.

The high evacuation cost currently takes a toll on refining margin, sources said.

The margins would receive a major boost following commissioning of the 660-km Numaligarh-Siliguri product pipeline in June 2007, they added.

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