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Pakistan's recent move to ease trade with India could translate into a big opportunity for Hindustan Petroleum Corporation's Bhatinda refinery which is scheduled to be commissioned soon.
The nine million-tonne project, planned with an outlay of Rs 19,000-crore, was conceived to meet the growing need for petroleum products in the North. Pakistan will be an added bonus as a market and all HPCL needs to do is invest in a 100-kilometre pipeline linking Bhatinda to Lahore.
Nothing has been decided yet though the oil major has already made it known in the recent past that is open to the idea of supplying products to Pakistan from the new refinery. It will be a pragmatic business model where the revenue will more than offset the relatively low investment in the pipeline.
Over a decade ago, Bharat Petroleum Corporation had explored the option of selling diesel and kerosene from its Numaligarh refinery in Assam to Bangladesh. The river route was first considered before it was extended to include rail and road options. Eventually, the proposal had to be shelved.
Critical gateway
With Pakistan now keen on facilitating trade with India, HPCL is best positioned to use Bhatinda as a critical gateway. A joint venture with Mittal Energy, the refinery's capacity can be doubled to 18 mt at a later date. The crude pipeline from Mundra to Bhatinda is already designed for 18-20 mt. Given that there is enough space for expansion of the refinery's units, any increase in capacity will not be an expensive affair.
The supply logistics for the northern region have already been planned with a product pipeline linking Bhatinda to Bahadurgarh near Delhi. Another network will take this beyond Kanpur which will ensure that there are no supply glitches in this part of the country.
Northern presence
The Bhatinda refinery is a critical part of HPCL's growth plan this decade and will signal its presence in the North, which is traditionally the bastion of IndianOil. The company had already kicked off its plans for the region four years ago by commissioning a product pipeline from Mundra in Gujarat to Bahadurgarh.
HPCL has refineries in Mumbai and Vizag with plans underway to commission a new one, the Maharashtra Refinery, in Ratnagiri. It also has a 17 per cent stake in Mangalore Refinery and Petrochemicals where ONGC is the majority partner with 71 per cent.
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