To fund capacity addition, single buoy mooring facility

Our Bureau

Kochi, Aug 25

Bharat Petroleum Corporation Ltd plans to invest Rs 5,000 crore at its newly merged Kochi Refineries Ltd. The proposals include setting up a new polypropylene plant, upgrading the quality of the bitumen plant, capacity addition from 7.5 to 10 million tonnes by 2009, and completion of the single buoy mooring facility (SBM) in 2007.

As a Navratna company, BPCL has enhanced powers with regard to investment and other daily operations. The combined balance sheet of the merged entity will facilitate financing of expansion and modernisation projects at economic costs, BPCL said.

Regarding regional consumption, BPCL said that Kochi Refineries' current capacity of 7.5 million tonnes is higher than the State's existing demand, estimated at four million tonnes. However, with the merger, BPCL would be able to evacuate products from the refinery to a larger geographical area through an established network. The merged entity is expected to achieve greater efficiency through optimisation of product mix and rationalisation of logistics for product movementfrom the refinery at Kochi.

BPCL currently has a 12-million tonnes refinery at Mumbai and a 3-million tonnes subsidiary at Numaligarh.

Geographic spread

The merger is of strategic importance to BPCL, as it provides the geographic spread for its three refineries located on the country's West, East and South. The proposed 6-million tonnes refinery at Bina in Madhya Pradesh will further provide BPCL with a total refining capacity of 30 million tonnes.

BPCL was selected by Cochin International Airport as equity partner and provides hydrant facilities for aircraft fuelling at the airport. BPCL was also selected by NTPC to supply a minimum guaranteed quantity of 4.5 lakh tonnes of naphtha to the first thermal power plant in Kerala.

BPCL has laid 308 km of pipeline from Kochi to Karur via Coimbatore for evacuating about 3.3 million tonnes surplus from Kochi Refineries at an investment of about Rs 490 crore. BPCL as the equity partner in Petronet LNG is investing a huge capital for the first LNG import terminal at Kochi, thereby bringing the fuel to Kerala ahead of many other industrialised states.

(This article was published in the Business Line print edition dated August 26, 2006)
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