Date:09/02/2005 URL: http://www.thehindubusinessline.com/2005/02/09/stories/2005020901630200.htm

Back BPCL to expand Trombay refinery capacity to 12 m.t.

Archana Chaudhary

Mumbai , Feb. 8

BHARAT Petroleum Corporation Ltd (BPCL) will see its import bill swell further in the coming fiscal. The company will need another three million tonnes of imported crude oil for 2005-06.

BPCL, which processes nine million tonnes of crude at its Trombay refinery, is raising its capacity to 12 million tonnes at a cost of Rs 2,000 crore. The new unit will be commissioned in June, according to Mr Mukesh Rohatgi, Director (Refineries). The capacity expansion will help BPCL cater to the North Indian market, where it does not have refining presence and has to rely on Indian Oil Corporation for product supply.

BPCL imported more than 50 per cent of its crude requirements last year. The rest it bought from ONGC's Mumbai High oil field. With negligible growth in domestic crude production, BPCL will have to tie up its additional requirement through term contracts and the spot market.

BPCL buys close to 70 per cent of its imported crude through term contracts that are renewed each year and the rest from the spot market.

According to a senior BPCL official, the company may have to import up to 65 per cent of its crude requirement once it begins operating its 12-million-tonne refinery to its full capacity. The company may process up to 10.5 million tonnes in 2005-06 and then expand capacity the following year, he said.

The capacity use will co-ordinate with the extension of its 600-km Mumbai-Indore pipeline up to Delhi. BPCL plans to add another 700-km of the pipeline to reach Delhi at a cost of about Rs 800 crore.

Apart from the refinery expansion, BPCL has also completed modernisation at Trombay for producing fuels compatible with Euro III environment standards.

It is also setting up a base oil-producing unit at a cost of Rs 330 crore, which will be completed by April 2006.