Singapore: State-run Hindustan Petroleum Corp Ltd (HPCL) plans to add a new crude distillation unit (CDU) at its Vizag refinery, which will raise the overall capacity to nearly 300,000 barrels per day (bpd), a company source said on Wednesday.
The project, coupled with another two greenfield refineries, will boost HPCL’s refining capacity to 990,000 bpd, compared with 1.24 million bpd at privately owned rival Reliance Industries.
HPCL plans to build a 9.0 million tonnes per year (tpy), or 180,000-bpd, CDU and scrap an old 1.8 million tpy (36,000 bpd) unit at the refinery in Vizag in southeastern India, the company source said.
“We’re getting environmental and land clearance which could take six months,” he said.
The CDU will take around three years to build and the project will include secondary units, he said, but declined to elaborate further.
HPCL currently operates three CDUs at the 150,000-bpd Vizag refinery. It also runs a 110,000-bpd refinery in Mumbai.
The company expects oil products sales to nearly double in 2016-2017 when it completes at least two new refinery projects, a company executive said earlier on Wednesday.
HPCL expects sales to reach 43.4 million tonnes of oil products in 2016-2017, up from the current 24 million tonnes, P. A. B. Raju, director of Visakh refinery said at the Downstream Asia conference.
Its refining capacity will be increased to 42 million tonnes per year (tpy), or 840,000 barrels per day (bpd), from the current 16 million tpy, when two greenfield refinery projects at Bathinda and in the Maharashtra state are completed, Raju said.
“The kind of growth rate that has been predicted for India and the Asia region is such that at some point demand is going to catch up with the capacity which we have,” he said.
“We’re making products which are meeting international standard and can be sold anywhere in the world.”
The projects will provide economies of scale, allowing the company to expand without space constraint at existing sites, Raju said. HPCL along with its partner Mittal Energy, owned by billionaire Lakshmi Mittal, will mechanically complete the 9 million-tpy Bathinda refinery in northern India by March next year.
The company’s chairman said in May that HPCL is expected to take a final decision on the capacity and location of the new coastal refinery in western Maharashtra state by end-August. HPCL was looking at building a 300,000 to 400,000 bpd refinery, he said.