The Hindu : Business : BPCL to expand Mumbai refinery

Online edition of India's National Newspaper
Friday, Jul 30, 2004

Business

Business

BPCL to expand Mumbai refinery

By Sushma Ramchandran

MUMBAI, JULY 29 . In a bid to take its place among the leading oil companies, the public sector Bharat Petroleum Corporation Limited (BPCL), which has already reached the Fortune 500 list, is set to not only expand its flagship Mumbai refinery but achieve Euro III norms for auto fuels production.

As part of a major modernisation and upgradation project, the company is investing Rs. 2,259 crores to the raise refinery's capacity by three million tonnes from 8.8 to 12 million tonnes annually. The project also entails establishing a lube base oils stock and thereby reducing dependence on imports.

Pipeline project

Giving details of the investment plans, the Director (Refineries), Mukesh Rohatgi, said extension of the existing products pipeline from Mumbai to Manmad and Indore had been proposed right up to Delhi to improve the company's competitive edge. The project estimated to cost about Rs. 750 crores would be implemented within two years of final approval, he said.

The additional three million tonnes per annum refinery capacity is also expected to boost the company's profits which have been taking a hit lately owing to the burden of subsidy on kerosene and LPG as well as constraints on raising auto fuel prices. Though the Government has just decided on a price band system for raising diesel and fuel prices, company officials say this will not compensate for the impact of high global prices in the last six months.BPCL and other oil marketing companies are likely to raise prices within this new band by the end of the month, but they say the government's refusal to allow price hikes of diesel and petrol ever since the elections were announced has already had an impact on profitability.

As for the refinery modernisation project, Mr. Rohatgi told visiting newspersons that the BPCL Mumbai refinery was the first to process Bombay High crude but was now seeking to become flexible to utilise a variety of crudes. The modernisation involved setting up a hydrocracker with technology from Chevron of the U.S. as well as a new crdue distillation unit that were expected to give the refinery the capacity to use light and heavy crude oils.

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