• PAGE ONE
• INDEX
• HOME

Further cost escalation feared -- BPCL awaits Oman decision on Bina

Santanu Sanyal

KOLKATA, Nov. 29

GIVEN a choice, Bharat Petroleum Corporation Ltd (BPCL) would like to go ahead with the implementation of the 9 million-tonne per annum (mtpa) capacity refinery proposed to be set up at Bina in Madhya Pradesh. The indecision on the part of Oman, whose na tional oil company is to participate in the project, is delaying implementation, according to a spokesman of the company.

The project was conceptualised in the early 90s and accorded all the approvals by 1998. A 900-km long crude pipeline was to be laid from Hazira (Gujarat) to Bina for transportation of imported crude to the proposed refinery. The Gujarat Government too to ok a long time to giving environment clearance to the length of the pipeline to be laid through the State.

BPCL, it is pointed out, could not abandon the project despite the delay. It has already spent several hundred crores of rupees on constructing terminals and depots close to the site of the project. An early decision of Oman, either way, therefore is cal led for so that the project does not become a victim of yet another round of cost escalation. The original cost of an estimated Rs 6,000 crores has already jumped to nearly Rs 9,000 crores.

Meanwhile, the BPCL board has cleared the proposal for capacity expansion of its Mahul (Mumbai) refinery from the present 9 mtpa to around 12 mtpa. The proposal is lying with the Government for clearance.

Right now, BPCL's total refining capacity is 18 million tonnes spread over three refineries — Mahul (9 mtpa), Kochi (6 mtpa) and Numaligarh (3 mtpa). While there is no immediate plan for capacity expansion of the Kochi refinery, the one at Numaliga rh (Assam) may go for capacity expansion.

The performance of the Numaligarh refinery, which is one-year-old, has been very good. Right now, it is producing at two million tonnes per annum but the market response to the product, thanks to its superior quality, has been excellent. Certain financia l concessions granted by the Government, as it is located in the North-Eastern region, too has helped the refinery to post good results, the spokesman said.

Bhutan has urged BPCL to take care of its entire requirement of diesel, estimated at 1,500 kl per month, through road transport. In summer, the requirement met is met largely by BPCL (80 per cent) and partly by Indian Oil Corporation (20 per cent).

In winter, when the temperature drops to as low as minus 17 degree Celsius, it is only BPCL which meets the entire diesel requirement of Bhutan as the quality of diesel produced by its Numaligarh refinery has been found to be ideally suited for the preva iling temperature.