The Indian refining sector has been given a boost with the news that three large refinery projects are set to be operational in the next 18 months. The projects at Vadinar, Bathinda and Paradip are all nearing completion, at which point the country’s refining capacity will be significantly increased in order to meet booming domestic demand.
Essar Oil Ltd has announced that it expects to complete the first phase of the ongoing expansion project at the Vadinar oil refinery in 2012.
Currently, the refinery, based in Gujarat, is operating at a throughput of approximately 14.76 million tpy, well above its nameplate capacity of 10.5 million tpy. After the phase I expansion, its refining capacity will be increased to 18 million tpy.
As on June 30, almost 92% of the work on expansion project was completed. The optimisation project, currently approximately 56% complete, would further enhance the capacity to 20 million tpy. The owner/operators are confident that the project will be completed fully by September 2012.
Completion of the phase I expansion will also enhance the complexity of the refinery from 6.1 to 11.8, enabling it to increase the proportion of heavy and ultra heavy crude that it processes. The enhanced refinery will also produce a higher proportion of middle and light distillates and improve gross refining margin.
Additionally, a 9 million tpy project by HPCL Mittal Energy (HMEL) is expected to be commissioned between October and December 2011. The joint venture company between Hindustan Petroleum Corporation Ltd (HPCL) and Mittal Energy Investments has confirmed that work is almost complete on the ambitious project at Bathinda, Punjab state.
Initially, HMEL had scheduled that the refinery would be operational by July after work began in November 2007. The company has already received its first consignment of crude oil from the Gulf in preparation for a trial run.
After commissioning, the refinery will produce high value petroleum products such as LPA, naphtha, petrol and diesel.
In other HPCL news, the company is hopeful that a FCC unit at its Vizag refinery in Andhra Pradesh state will return to operations from August 21st following an unplanned shutdown on August 1st.
In less promising news, the state owned Indian Oil Corporation’s (IOC) 15 million tpy Paradip refinery in Orissa is expected to be completed in 2013, a year later than expected.
The company had been aiming to be operational by March 2012, after which point new refinery commissions will not be eligible for exemption of payment of income tax on revenues earned for the first seven years of operations.
The complex is being configured to process the heaviest and dirtiest crudes and also incorporates a petrochemical complex.
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