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India Energy: Major Oil Refinery For Maharashtra

NEW DELHI — India has chosen western Maharashtra state as the location for its biggest oil refinery so far with a capacity of 60 million tons per annum (mtpa) for an investment of 1.5 trillion rupees ($22 billion).

State-run companies Indian Oil Corp. (IOC), Bharat Petroleum Corp. (BPCL) and Hindustan Petroleum Corp. (HPCL) together with another government-owned company, Engineers India, will build the refinery in two phases of 40 mtpa and 20 mtpa. Construction is predicted to start in 2017.

The facility will produce petrol, diesel, liquefied petroleum gas, aviation turbine fuel, and feedstock for petrochemical plants in the plastic, chemical and textile industries of Maharashtra, in keeping with Dharmendra Pradhan, India’s petroleum minister.

The first phase will involve investment of over 1 trillion rupees, he said in a series of Twitter posts after talking with Devendra Fadnavis, Maharashtra’s chief minister, on Jan. 25.

Pradhan said that his ministry and the state government would collaborate on “early identification” of an acceptable site and crude oil price volume chart other details.

The project is slated for the Maharashtra coast and being built at an estimated cost of 25 billion rupees per crude oil price volume chart million-ton refining capacity. It adds capacity to two existing refineries belonging to HPCL and BPCL in Mumbai, the state capital.

Maharashtra consumes about 18 million tons of petroleum products each year. According to Fadnavis, the new refinery will provide employment there to over 100,000 people, both directly and indirectly.

India’s biggest existing refinery has an installed capacity of 33 mtpa and was commissioned in 1999 in Jamnagar, Gujarat, a neighboring state of Maharashtra, by Reliance Industries. A private company, Reliance in 2008 added an adjacent refinery with 27 mtpa capacity to concentrate on exports. The Jamnagar refinery complex is the world’s largest.

To fulfill India’s burgeoning energy demand, IOC, which accounts for 31% of national refining capacity, has built an 11th refinery at Paradip in the eastern state of Odisha. The innovative plant is to be opened by Prime Minister Narendra Modi on Feb. 7, and will boost IOC’s overall refining capacity beyond 80 mtpa from 65.7 mtpa at present.

India must import around 80% of its crude oil and 35% of its natural gas requirements. Despite its hydrocarbon deficiency, it has invested heavily on refining and processing capacity.

“Despite being a net importer of crude oil, India has with 23 refineries become a net exporter of petroleum products by investing in refineries designed for export,” Pradhan said on the recent 4th India-Africa Hydrocarbons Conference.

Indeed, India now has the fourth largest refining capacity in the world after the U.S. China and Russia, and accounts for 4.5% of world output. Within the financial year ending last March, India exported 63 million tons of petroleum products to more than 55 countries.

India’s present refining capacity exceeds 215 mtpa while domestic consumption stands at 165 mtpa. The latter is expected to increase to 550 mtpa by 2040.