London: India will probably expand oil refining capacity by almost two million barrels a day in the next five years by constructing 13 expansion units or new plants, a Singapore-based analyst at IHS Inc. said.
New refineries such as Reliance Petroleum Ltd’s 5,80,000 barrel-a-day Jamnagar plant and expansions such as a planned 60,000 barrel-a-day addition at Indian Oil Corporation’s Panipat refinery will add up to more than 1.9 million barrels a day of capacity by 2011, said Jeremy Bowden, Far East mid-stream manager at IHS.
India’s proximity to West Asian and Asian markets and “low labour and land costs,” have encouraged “higher-than-average refining margins,” Bowden said in London on Wednesday.
IHS estimates 13 units will be built, and aside from those “many others are planned,” he said.
India is likely to boost exports of oil products such as diesel and petrol to 645,000 barrels a day this year, from 440,000 barrels a day in 2006, though the country will remain a net importer of oil because it uses imported crude oil in its refineries.
India also imports coal and gas. The country’s current refining capacity is about three million barrels a day. A 1.9 million-barrel boost represents an increase of about 63%.
“Last year, refined products became India’s highest-earning merchandise export,” Bowden said.