BackIndian MRPL to buy more spot crude, cut jet exports
Indian MRPL to buy more spot crude, cut jet exports
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By Reuters
New Delhi: India’s Mangalore Refinery and Petrochemicals Ltd’s (MRPL) will buy 20,000 barrels a day (bpd) of imported crude in the year to March 2008 as its domestic supplies decline, a company official said on 1 June.
The company, which didn’t make any spot purchases last year, will buy around 1 billion tonne a year or 20,000 bpd of sweet crude from the spot market, as its share of supplies from India’s largest oil field Mumbai High have declined.
The refinery will also cut back on jet fuel exports this year as it boosts production of diesel, part of the same distillate production pool, to supply other state refiners, he said. And exports of naphtha and fuel oil will end in mid-2010 after refinery upgrades and new petrochemical production.
MRPL, a subsidiary of Mumbai High’s operator and flagship upstream firm ONGC has already tapped the spot crude market in the current financial year to buy 600,000 barrels of Nigeria’s Antan and 650,000 barrels of Yemen’s Masila so far.
“We are mostly buying sweet crude in tenders -- but it depends on a month to month basis," the official, who declined to be named, told Reuters.
MRPL, which has annual term contracts to buy 9 million tonnes (180,000 bpd) of heavy and sour grades, has begun buying sweet crude to maintain a 25% share of low-sulphur grades on its slate.
Of the total term imports, MRPL buys around 100,000 bpd from Iran and 60,000-70,000 bpd from Saudi Arabia and Abu Dhabi. The official said it also takes ONGC’s Nile Blend occasionally.
MRPL’s refinery operates at over 2,40,000 bpd and the company expects refinery runs to be similar this year, he said. But MRPL’s jet fuel exports in the current financial year are expected to decline from last year’s 600,000 tonne as it is covering for diesel shortfalls at other state-run refiners.
“We are a balancing refinery for this country. If any state-run company faces shortages for products, MRPL is available," he said. It plans to increase its refinery capacity to 300,000 bpd in 2010 and raise its heavy oil processing by 60,000 bpd.
As a result of more upgrading capacity and the launch of a new petrochemical complex, MRPL will end exports of naphtha and fuel oil from mid-2010, after exports last year of 1.05 million tonne of naphtha and 2 million tonne of fuel oil.
“Naphtha exports will end. Once we have the aromatic complex heavy naphtha will go there," he said. The expansion is aimed meeting Euro III/Euro IV fuel specifications that cut sulphur in motor fuels, while fuel oil will be used for a coker unit to make higher value products.
Analysts say that a huge expansion in Asian and Gulf refinery capacity, with India looking to become an oil product export hub, could depress regional margins by the end of the decade.
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