Muscat - Bharat Petroleum Corporation Ltd (BPCL), India's second largest oil marketing company, has decided to opt for a module-wise capacity expansion of the Bina refinery on account of cash constraints and less-than-expected returns from the refinery, according to an Indian media report that quoted a senior official of BPCL.
The Bina refinery, located at Bina in the Indian state of Madhya Pradesh, is owned by Bharat Oman Refineries Ltd (BORL), a joint venture between BPCL and Oman Oil Company, which owns a 26 per cent stake in it. The refinery currently has the capacity to refine 6mn tonne per annum (mtpa) of Arab mix crude.
The report said that under the new plan, BORL will invest smaller amounts to set up smaller modules of 2mtpa, stabilise the new capacity, generate sufficient returns and invest the returns in stetting up the second module.
"Looking at the growth in demand for MS (petrol) and HSD (diesel), we will require a capacity of 12mtpa at Bina. However, we have a huge commitment at Kochi in Kerala state and Bina itself has not been able to deliver cash-positive returns. It is, therefore, difficult to double the capacity," said BK Datta, director, refineries at BPCL, as quoted by India's The Financial Express.
Datta said the company will increase the first module of 2mtpa mainly through de-bottlenecking, which will require less investment and could turnaround faster for the company. Later, smaller investments will be made as and when the returns start pouring in. "The target will be to reach close to 12mtpa in the next five years. That will help us meet the incremental demand of MS and HSD," he said.
© Muscat Daily 2014
