The mini-refinery of ONGC at Tatipaka in East Godavari has started producing mineral turpentine oil (MTO), though producing MTO was not envisaged while setting up the refinery, according to a press release.

MTO is being produced in accordance with the standard parameters of the Bureau of Indian Standards (BIS). The production process involves manoeuvre of the operational methods of the refinery and maintaining appropriate temperatures while refining. This results in MTO. The process needs no additives, additional processing equipment, manpower, investment and structural changes in the design of the refinery, adds the release.

The mini refinery is expected to produce 10,000 tonnes a year and is likely to fetch Rs 16 crore. A MoU has been signed with HPCL for sale of MTO. HPCL will be buying MTO as well as naphtha from ONGC and ONGC will be buying lube oil from HPCL.

“It is a win-win MoU for both the oil PSUs,” said Mr A.A Khan, Executive Director and Manager, Rajahmundry Asset, in Tatipaka on Monday.

This deal assumes significance in the light of declining profits of the mini refinery owing to drastic fall in the offtake of naphtha, as the users have shifted to natural gas after availability of gas in the local market has increased with Reliance getting into the market.

Rajahmundry asset performance:

In fiscal 2010-11, the refinery produced 67789mt against the target of 66,000 mt of value-added products. The refinery produces naphtha, superior kerosene oil, high-speed diesel / high flash high speed diesel.

The asset produced 0.304 mt of oil in 2010-2011 against the target of 0.282 mt, 1384.3 million metric standard cubic metres (mmscm) of natural gas against the target of 1,356 mmscm. The asset recorded 1,374.2 mmscm sales.

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