The Hindu Business Line : `Bharat Oman's Bina refinery capacity could raise to 8 mt'

Chennai April 14 Bharat Oman Refinery Ltd (BORL) is putting up a 6-million-tonne refinery at Bina, Madhya Pradesh, but with a little de-bottlenecking the capacity of the refinery could be easily raised to 8 mt, the company's Managing Director, Mr R.P. Singh, told Business Line recently.

Further, with a little more expenditure the capacity could still be raised to around 12 mt, he said, while answering a question as to whether a refinery of 6-mt capacity is viable today.

The Rs 10,300-crore Bina refinery has been designed to produce more diesel — 46 per cent of the output will be this product. Mr Singh said that the refinery was quite likely to be completed a good four months ahead of its schedule of December 2009.

The entire portfolio of products is to be turned over to Bharat Petroleum Corporation Ltd (BPCL), which owns the majority stake in the Rs 3,990-crore equity of BORL. A pipeline from Bina will connect with the Mumbai-Manmad-Indore-Delhi product pipeline at Kota, Rajasthan. BORL's products will most probably reach consumers in the Capital.

Oman Oil, which was to take a 26 per cent stake in the company and had put in Rs 76 crore for the purpose, has not invested any further because as the project was getting delayed in environmental issues, the company committed its resources elsewhere.

However, Oman Oil intends to stay invested in BORL and still has the option of raising its stake to 26 per cent, from about 3 per cent now.

Indeed, BORL could have other investors too on board. Mr Singh said that many companies were interested in partnering BPCL in the Bina refinery. He said the management's endeavour would be to complete the project ahead of time, thereby enhancing the value of the refinery. When the project nears completion BORL would take a call on which investor to take on board.

Expenditure

On the progress the project has made so far, Mr Singh said that expenditure committed amounted to Rs 4,000 crore and the money actually spent was Rs 600 crore. Physical progress made is about 14 per cent of the project.

A noteworthy feature of the project is a 99-MW, petcoke-based power project, which will produce steam for use by the refinery (to heat crude oil) and about 70 MW of saleable power. This component of the project is worth about Rs 950 crore.

This is also the country's first petcoke-fired power project and its success will set a precedent for other refineries to follow. Almost all the refineries in the country have been toying with the idea of putting up power projects to burn up the refinery residues. None has made any progress because the emissions will contain sulphur, removing which will be expensive and make the project itself unviable.

However, in BORL, the petcoke is to be mixed with limestone and fired in the boilers. Sulphur comes out in the form of a chemical compound of calcium and sulphur and can be removed physically.

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