HPCL to commission Rajasthan refinery ahead of Ratnagiri facility

Hindustan Petroleum Corporation has decided to put Rajasthan ahead of Maharashtra in its refinery commissioning dates.

The original plan was to get in place a nine million tonne facility in Ratnagiri (called the Maharashtra Refinery) by 2016 whose capacity would be doubled in due course of time. HPCL now believes it makes more sense to fast-track the more recently planned Rajasthan refinery where ONGC (Oil and Natural Gas Corporation) is its ally.

Sources say Rajasthan can be completed faster than Ratnagiri which is likely to face delays thanks to a slew of environmental clearances required in a ‘sensitive coastal location’. Since both projects have been planned with capacities of nine mt, it would not impact HPCL’s refining targets over the next four years.

“The idea is to have 42 mt in place by 2016-17 which will be perfectly in sync with the size of the retail network,” top sources told Business Line . At present, the total refining capacity is nearly 24 mt from its three refineries in Mumbai, Visakhapatnam and Bhatinda.

Plans are now underway to double the output at Visakhapatnam to 18 mt which will then become HPCL’s single largest facility over the next four years. The Bhatinda and Rajasthan refineries will be tied at nine mt each while Mumbai will continue at 6.5 mt.

Capacity at Bhatinda can be doubled to 18 mt too but this will largely depend on marketing agreements sewn up with neighbour, Pakistan. All it takes is a 100 km pipeline to carry petrol and diesel from the refinery to Lahore across the border.

Even if this business model takes longer than expected, HPCL will have its hands full in meeting North India’s growing requirements for petro-products from its facilities in Bhatinda and Rajasthan. The delay in commissioning the Ratnagiri refinery (to cater to the western region) can be offset by the ONGC-controlled Mangalore Refinery and Petrochemicals in which HPCL has a 17 per cent stake.

Interestingly, the Ratnagiri project was first conceived to replace the existing decades-old Mumbai refinery which is literally gasping for space in a residential zone. Realising that this would not be practical, HPCL decided to commission the new refinery in two phases of nine mt each.

The oil major plans to revive its mega petrochemical-cum-refinery project at Visakhapatnam where another 15 mt capacity will be added. And if things go according to plan, Bhatinda, Ratnagiri and Rajasthan will clock 18 mt apiece post-2025 which translates to overall capacity of over 90 mt in the next 15 years.

murali.gopalan@thehindu.co.in

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