OilVoice - Indian Refiner Hindustan Petroleum To Build New Refinery

Indian Refiner Hindustan Petroleum To Build New Refinery

Wednesday, February 17, 2010

Indian refiner and fuels distributor Hindustan Petroleum Corporation has made public its intent to build a new 400,000 barrel per day (bpd) oil refinery. The refinery, which is to be built in a coastal location to the south of Mumbai, is budgeted to cost around $5.4 billion.

According to reports, due diligence on the planning of the refinery will be carried out next year and the project is expected to be completed by the year 2015.

Meanwhile, Hindustan is currently nearing the completion of a separate 180,000 bpd refinery which is being constructed in Bhatina in Punjab.

Building is expected to be completed in May 2011. The refinery, which is expected to cost around $3 billion, was originally expected on stream in December of this year. Hindustan is currently in talks over supplies of crude feedstock with several Middle Eastern countries, including Iraq and Saudi Arabia.

The firm's new refinery will be a major investment for the company.

With the Bhatina refinery and the expansion of the Vizag refinery both also underway, the firm could add up to 700,000 bpd of capacity to its portfolio when all three projects are completed. However, it remains to be seen whether Hindustan will succeed in bringing all three projects on stream by 2015.

At present, India had a total of 18 active oil refineries - according to the Oil and Gas Journal Worldwide Refining Survey, giving the country a total installed capacity of over 2.8 million bpd. This is slightly lower than the figure given by the BP Statistical Review of World Energy, June 2009, which put capacity at just under 3 million bpd. By market share (9%) Hindustan is the country's fourth largest refiner, trailing Reliance Industries, Indian Oil Corporation and downstream player Bharat Petroleum Corporation.

Hindustan is the second largest integrated refining and marketing group in India, making up around 22% of the Asian nation's refining capacity. Its two wholly-owned refineries, at Mumbai and Visakhapatnam (Vizag) have installed capacities of 110,000 bpd and 152,000 bpd, respectively. The firms also has a 16.95% stake in Mangalore Refinery and Petrochemicals, which operates a 180,000 bpd refinery in Mangalore. To add to its portfolio, Hindustan plans to add a further 120,000 bpd to its refining capacity by 2013. It plans to do so by doubling the output at its Vizag refinery.