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Pratim Ranjan Bose

To upgrade hydro-cracker unit; team up with Assam Co

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Kolkata Jan. 29 Numaligarh Refinery Ltd (NRL) - a BPCL subsidiary - has finalised a Rs 300-crore investment on upgradation of diesel hydro-cracker unit to replace its existing Euro-II diesel production capacity with Euro-III fuel. The commissioning of the project is expected to begin in 2007-08.

The project, which is a part of Rs 625-crore investment plan for next five years, may also help enhance the diesel production capacity by 30 per cent. NRL currently produces 1,856 thousand tonnes of diesel. The investment plan will be financed from internal accruals.

Company sources said that apart from diesel hydro-cracker expansion, NRL has decided to join a joint venture with Assam Gas Company for laying the Rs 350-crore gas pipeline from Dhuliajan facility of Oil India Ltd to Numaligarh. NRL will pick up 40 per cent stake in the pipeline. Assam Gas will hold the majority 60 per cent stake.

Natural gas will replace NRL's current consumption of naphtha in hydrogen plant and the 37-MW captive power unit. Apart from reducing the operational cost, the project will also increase the exportable surplus of naphtha resulting in higher returns. NRL currently exports naphtha through Haldia port.

Meanwhile, NRL is also exploring the possibility setting up a 40-50-tonne wax unit. The project is expected to cost roughly Rs 500 crore. Engineers India Ltd is preparing a detailed feasibility report for the project.

"Once the project is finalised we will take a call on the financing options including tapping the capital market," a company official said.

It may be mentioned that NRL was previously considering an IPO to finance the proposed capacity augmentation from 3 million tonnes to 4.5 mt. The project, however, is now put in the backburner due to non-availability of crude.

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