New Delhi : The Oil and Natural Gas Corporation (ONGC) has cleared an investment of Rs. 8,000 crore in its subsidiary, the Mangalore Refinery and Petrochemicals Limited (MRPL).

With this huge investment for an integrated refinery up-gradation project, the refinery capacity will be raised from 9.69 million tonnes to 15 million tonnes a year.

It will also make the MRPL one of the largest public sector refinery investments at a single location in the country.

A company release says "a capital expenditure of Rs. 8,000 crore has been approved by the ONGC Board in its meeting held at New Delhi on 3rd March 2006, clearing the Integrated Refinery Upgradation Project for its subsidiary Mangalore Refinery and Petrochemicals Ltd."

The project is expected to be completed in three-and-a-half years. On commissioning, it will significantly enhance value addition in the refinery product slate.

"The distillate yield will improve significantly, minimising the bottoms where the realisation is lower," it said. The project envisages production of high value products such as propylene as well as Euro-III and/ Euro IV compliant gasoline and diesel, which have a good demand in international markets.

The estimated production of propylene from the upgraded refinery complex will be 300,000 tonnes a year.

The company says that with implementation of this project, the new refinery configuration will allow processing of higher proportion of lowcost sour and heavy crudes leading to better margin.

In order to enter the high-priced lubes market, a 250,000 tonnes a year of Lube Oil Base Stock (LOBS) production facility will be built as part of the project.

This will produce high-end Group II (plus) and Group III LOBS.

The Chairman of MRPL and Chairman and Managing Director of ONGC, Subir Raha, said,"This is the first of a series of major projects planned at Mangalore, and the integrated upgradation project will further improve the cost-efficiency of MRPL."

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