India is planning to double its oil refining capacity in the next five years. The Union Minister for Petroleum and Natural Gas Dharmendra Pradhan, has announced that the country is set to double its refining capacity for crude oil to 450-500 million tpa by 2030 from the current level of about 250 million tonne.
In a major policy drive to give boost to petroleum and hydrocarbon sector, the government unveiled a series of initiatives. The government announced gas pricing reforms, policy framework for early monetisation of CBM, Discovered Small Fields (DSF) Policy under which the government has awarded 53 contract areas, DSF-I and DSF-II bid rounds based on revenue sharing model, Policy framework for extraction of CBM by Coal India (CIL) and its subsidiaries in coal mining area, Hydrocarbon Vision 2030 for North East.
The Indian refining industry has established itself as a major player globally. India is emerging as a refining hub and refining capacity exceeds the demand. The country’s refining capacity has increased from a modest 62 million tpa in 1998 to 249.366 million tpa at present, comprising 23 refineries – 18 under public sector, three under under private sector and two in joint venture. During 2019-20, the country has exported 43.60 million tpa of petroleum products.
Some of the key developments taken up by the Centre in 2020 for this sector includes – awarding 11 blocks having an area of 19,789 sq km in October 2020 under OALP bid Round V. During FY21, a total of five discoveries (four from nomination regime — three from ONGC, one from OIL; and one from PSC) have been monetised as on November 2020. Gas Trading Platform by Indian Gas Exchange (IGX) was launched which will be a delivery-based trading platform for delivery of natural gas. IGX is 100 percent subsidiary of IEX presently. A total of 1,544 km of pipelines have been laid as part of the National Gas Grid in 2020.
As per data collated by Projects Today, in the months of January and February 2021, a total of 22 projects in Petroleum Products Refinery and Petrochemicals Hydrocarbons sectors witnessed developments. Of these 10 projects are in the under execution stage, 11 in planning and one in nascent stage. These projects together will see an investment to the tune of Rs 2,14,719 crore. Of these a big ticket project worth Rs 43,129 crore is being executed by HPCL Rajasthan Refinery at Pachpandra in Rajasthan. The project involves setting up of a nine million tpa petroleum refinery and petrochemical complex. The project is expected to be completed by March 2023.
Another high ticket project is being taken up by the Chennai Petroleum Corporation valued at Rs 37,450 crore. The project involves setting up of nine million tpa refinery unit at Cauvery Basin, Nagapattinam in Tamil Nadu. Prime Minister Narendra Modi laid the foundation stone for the project on 18 February 2021.
Indian Oil Corporation has also undertaken the capacity expansion of Panipat Refinery in Haryana entailing an investment of Rs 32,946 crore. The IOCL Board of Directors recently accorded approval for capital investment for capacity expansion of Panipat Refinery from 15 million tpa to 25 million tpa along with installation of polypropylene unit and catalytic dewaxing unit. The scheduled commissioning date for the project is September 2024.
In February 2021, the Union Ministry of Environment, Forest and Climate Change (MoEF&CC) also accorded environmental clearance to Reliance Industries’ petrochemical manufacturing facility expansion project worth Rs 2,270 crore. The project involves expansion and debottlenecking of petrochemical manufacturing facility with capacity of 4,500 tpm at GIDC in Vadodara district of Gujarat. The project expansion also includes captive power plant with capacity from 81 MW to 95 MW.
The Central government has also lined up divestment of the Bharat Petroleum Corporation (BPCL) through privatisation. The Centre aims to raise Rs 90,000 crore from stake sale. The government’s target price for its 52.98 percent stake is based on the value of BPCL’s assets. The Department of Investment and Public Asset Management (DIPAM) is managing the privatisation of BPCL.
The government has received three expression of interests (EoIs) including one from Vedanta and one each from two international funds. EoIs will be used for pre-qualifying the interested parties in accordance with eligibility criteria and disqualification conditions. Those qualified, would be allowed to participate in Stage-II, where request for proposal (RfP) and financial bids will be submitted. One quoting highest value will ultimately get BPCL.