The Bina refinery, which the Prime Minister, Dr Manmohan Singh, dedicated to the nation on Friday, marks a triumphant saga for Bharat Petroleum Corporation (BPCL).

Conceived in the early 1990s as the Central India refinery, it looked as if it would only remain a project on paper.

There were huge delays largely on account of environmental clearances which caused Oman Oil Company, the joint venture partner, to cap its investments in the refinery.

It is to BPCL's credit that it hung in there and ensured that investments in Bina continued even during the liquidity crisis of 2008-09.

“It was a big decision considering that all oil companies were reeling under the crude price onslaught and were borrowing heavily,” an oil sector official told Business Line .

Oman Oil is now back in the project with a 26 per cent stake, and BPCL would have reason to feel pleased, given that it got a handsome premium on sale of the additional equity.

And even while this seems a fairytale ending, BPCL had to wage a lone battle for years.

Doubting thomases

At one point, the Oil and Natural Gas Corporation (ONGC) was also keen to pick up a 15 per cent stake in the project as part of its vision to enter the downstream sector.

However, the delay did not help matters, and the decision was shelved.

ONGC, subsequently, got into the driver's seat at Mangalore Refinery and Petrochemicals, but has not quite fulfilled its marketing ambitions since.

Even while BPCL reiterated its faith in Bina, sceptics in the Government were convinced that this project was just not worth anyone's while.

After all, they reasoned, BPCL had been given a prime asset in the form of Kochi Refinery (as part of a recast where IndianOil took over Chennai Petroleum Corporation and Bongaigaon Refineries), and there was no reason for further expansion.

Today, BPCL's faith in Bina stands vindicated considering that the refinery will now be an integral part of its plan to boost its presence in central and northern India.

“These are the regions which are seeing tremendous consumption of petro-products and Bina will meet this need,” the official added.

Whither BPCL?

During the next two-three years, capacity of the refinery will be expanded from six to nine million tonnes (mt), with the ultimate objective being 15 mt by 2015-16.

This target is a key component of BPCL's ‘Dream Plan', where its refining capacity has been targeted at 45 mt over the next five years. By then, both Bina and Kochi Refinery will be tied at 15 mt apiece with Mumbai and Numaligarh Refinery (Assam) at 12 mt and 3 mt each.

What next after Bina? BPCL is now keen to make another ‘long waiting candidate', the 7.5-mt Allahabad refinery, a reality by 2020.

If everything goes according to plan, its capacity will have been doubled to 15 mt by then. BPCL will then have in its kitty refineries in the North, West, South and North-East.

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