New Delhi: State-run Hindustan Petroleum Corp. Ltd(HPCL) plans to set up an 18 million tonnes per annum (mtpa) refinery in Maharashtra, investing about Rs25,000 crore, to help it meet domestic demand, a top company executive said.
“We have to expand as the current refinery in Mumbai is land-locked,” said K. Murali, director (refineries) at HPCL.
The refining and marketing company is looking at a site on Maharashtra’s coast and is in talks with the state government for this, Murali added.
“We are planning the new refinery during the next Five-Year Plan (2012-17). Going forward, the new capacity may be further ramped up,” he said.
HPCL’s Mumbai refinery will be shut once the new refinery is commissioned.
The company currently has two refineries—at Mumbai (6.5 mtpa) and Visakhapatnam (7.5 mtpa)—and controls 20% of the market share.
HPCL is also constructing a 9 mtpa refinery at Bhatinda in Punjab in a joint venture with Lakshmi N. Mittal, chairman and chief executive of ArcelorMittal.
“After Bhatinda is commissioned, there will still be a (demand) gap of around 6 mtpa,” Murali said.
He added the new facility would be able to refine complex crude, and any excess capacity would be exported.
The country is aiming for a refining capacity of 255.78 mtpa by 2012.
Experts say plans to increase capacity should be seen in the context of India’s strategic geographical location—between the petroleum products market in East Asia and crude supplies in West Asia.
Public sector oil marketing companies have a dominant share of the petroleum products retailing business in the country and the government decides the price of the products sold by them.