BPCL plans refinery in Allahabad with 9mtpa capacity

BPCL plans refinery in Allahabad with 9mtpa capacity
Comment E-mail Print Share
First Published: Thu, Aug 02 2007. 12 52 AM IST
Updated: Thu, Aug 02 2007. 12 52 AM IST
Bharat Petroelum Corp. Ltd (BPCL), one of India’s largest oil marketing companies, plans to set up a refinery at Allahabad with a capacity of around 9 million tonnes per annum (mtpa) at an estimated investment of Rs9,000 crore, even as India is slowly emerging a regional hub for refining.
The work on the refinery is expected to begin five years after BPCL’s Bina refinery gets commissioned in 2009.
“We already have 2,800 acre of land at Allahabad. There is no habitation on the land and it is barren. The Vadinar-Bina pipeline can be extended to Allahabad,” said R.P. Singh, managing director, Bharat Oman Refinery Ltd (BORL), the company setting up the 6mtpa refinery project at Bina in Madhya Pradesh.
BPCL registered a net profit of Rs2,140 crore on a turnover of Rs1.08 trillion in 2006-07 and currently has a refining capacity of 22.5mtpa at Kochi, Mumbai and Numaligarh.
India’s consumption of petroleum products at present is around 112mtpa while it has a refining capacity of around 149mtpa. The government and the industry want to make India a regional refining hub. To start with, they hope to increase the country’s refining capacity by 62% to around 241mtpa by 2012.
Experts said plans to increase capacity should be seen in the context of India’s strategic geographical location: between the petroleum products market in the East and crude supplies in the West.
A Mumbai-based energy expert, who did not wish to be identified, said BPCL’s existing refineries were old and “need new technology”.
“The company also wants to increase its refining capacity. New technology will help it in refining heavier crude which in turn will also help it in increasing its refining margin,” he added.
Meanwhile, BORL plans to raise Rs1,000 crore through an initial public offering by the first quarter of 2008-09. The total investment required for the Bina refinery is Rs10,300 crore, of which Rs6,300 crore will be debt and the balance, equity.
“We want to complete 45% of the project before coming out with our IPO. This is because the more you wait, better it is for you as you get better valuation once the project progress is there for all to see,” said Singh, who added that the company has enough money to fund the project till the end of next year.
BPCL has a 48% stake in BORL with the Oman Oil Company holding a 3% stake. Of the balance, 25% will be offered to the public and 23% sold to a strategic investor. The company is looking to attract strategic investors from Saudi Arabia (Saudi Aramco), Kuwait (KNPC) and Brazil (Petrobras).
Comment E-mail Print Share
First Published: Thu, Aug 02 2007. 12 52 AM IST