New Delhi: Indian Oil Corp , the country’s biggest refiner, plans its first major purchases of Latin American crudes for its new 300,000 barrels per day (bpd) Paradip refinery and is unlikely to raise supplies from Iran, its head of refineries said on Wednesday.
Paradip refinery in eastern Orissa state is designed to process 60 percent Kuwait type grades and 40% Maya type crude, B. N. Bankapur said in an interview with Reuters.
“We can process Venezuelan crude, we can process Latin American crude ... All heavy grades can be processed. We will be looking at buying Latin American grades for processing at Paradip,” Bankapur said.
India is the world’s fourth-largest oil importer and state refiners together currently control nearly two-thirds of the country’s 4.17 million bpd refining capacity, which includes Reliance Industries’ export-focused 580,000 bpd plant.
The country’s energy needs are climbing as its economy grows 8-9% per year.
Bankapur’s tenure as head of refineries at IOC has seen construction of IOC’s giant naphtha cracker and several refinery upgrades to lift high sulphur crude processing and produce superior grade fuels. The 60-year-old leaves his post later on Wednesday at the end of his term.
He said he expected the Panipat naphtha cracker, currently operating at 70-8 % of capacity, to run at full throttle in three to four months.
After start up of the Paradip refinery, the company’s second coastal refinery, IOC will be geared to refine as much as 800,000 bpd of high sulphur crude, almost 60 percent more than in the last fiscal year, he said.
Commissioning of the Paradip refinery has been delayed by nearly a year to early 2013, junior oil minister R.P.N. Singh said recently.
Protests by locals over construction of the refinery has caused the delay, Bankapur said, but there should be no cost overruns, he added.
State-run refiners currently buy crude from the Middle East and Africa as their plants are not capable of handling tough and heavy grades from Latin America in large quantities.
IOC purchased a small quantity of Ecuador’s Oriente grade in 2007.
IOC directly owns 1.08 million bpd of crude processing capacity through its eight refineries, while its subsidiary Chennai Petroleum Corp operates about 230,000 bpd of capacity.
The company currently buys 30,000 bpd of Iranian crude, a fraction of its overall needs.
“I don’t think we are so much depending on Iran crude because the thrust is now to switch over to heavy crude rather than Iranian crude. I don’t think we will increase Iranian crude more than what we are taking today,” Bankapur said.
Though New Delhi has now managed to find a payment mechanism with Tehran after seven months of struggle, Bankapur sees easy replacement of Iranian oil should there be a need.
“Today also I can take out Iran crude and substitute it by other high sulphur crude. It could be Abu Dhabi, Iraq, Arab ... Our Iran imports are just 30,000 bpd. I can always switch to any other crude,” he said.
India’s central bank scrapped at the end of December a long-standing clearing house mechanism to pay for Iran oil imports under US pressure.