State-run Bharat Petroleum Corporation (BPCL), which requires around 6,000 acres for its refinery-cum-petrochemicals complex in Andhra Pradesh, has approached the government for land acquisition along the State’s coastline.

“We have almost identified the land. We have to start the acquisition process. We have approached the Andhra Pradesh government for acquisition,” Vetsa Ramakrishna Gupta, Director - Finance, BPCL, told in an analyst call on Thursday.

“Mainly we have to wait and see once the detailed project reports (DPRs) and field studies are over. We can firm up the numbers and then reach the final investment decision (FID) level. By December 2025-end, we can expect this final number,” Gupta added.

He explained that the BPCL board had approved ₹6,100 crore for pre-project activities, which is mainly for land acquisition.

“There are a couple of components in ₹6,100 crore. The major component is for land acquisition and development. There are certain DPR studies and field studies we have to carry out. It will take another six-nine months to complete the DPR and field studies,” he added.

Refinery-cum-petrochemicals complex

On the configuration of the refinery, Gupta pointed out that it takes a significant amount of pre-investment before a final decision on the configuration of the refinery is taken.

“Broadly, we are looking at two train options of 9 million tonnes (mt) and 1 mt, which will have a large intensity of petrochemicals. For instance, if we are going for 9 mt of refining capacity, we are looking at 3.8-4 mt of petrochemicals. Broadly, we are looking for a configuration of about 3-3.5 mt of petroleum products and around 4 mt petrochemicals,” he added.

“Roughly, the initial indication of capex will be around ₹95,000 crore at gross level. The Andhra Pradesh government has indicated a good amount of capital subsidy,” Gupta said.

BPCL is also exploring for a joint venture (JV) partner for the refinery complex.

He expected the project to be commissioned “48 months from the date of FID. We may may have to start this project along with Bina refinery expansion. By the time Bina reaches mid-stage, maybe the AP refinery project will start,” Gupta said.

Russian cargoes

Gupta said that crude oil shipments from Russia during March 2025 would be lower by 20 per cent due to the US sanctions. “Sufficient cargoes” from Russia are not available. Russian supplies accounted for 31 per cent of BPCL’s cumulative cargoes during Q3 FY25, compared with 34-35 per cent during Q1 and Q2.

Sufficient cargoes are available in the market from West Asia and the US, said Gupta, adding that the situation with Russia could be “temporary”.

Published on January 23, 2025