Will Kochi refinery expansion fuel growth for BPCL?
Bharat Petroleum has got the much-awaited environmental clearance to expand capacities at its Kochi refinery. The company, will now be able to feed not only rising dome demand, but can also strengthen export globally as companies in the US and Europe have shut plants on sluggish economic growth and weakening global demand.
November 23, 2012 / 03:36 PM IST
Bharat Petroleum (BPCL) has got the much-awaited environmental clearance to expand capacities at its Kochi refinery. The company will now be able to feed not only growing domestic demand, but can also strengthen its exports globally as companies in the US and Europe have shut plants on sluggish economic growth and weakening global demand.
The estimated cost of the expansion project is around Rs 14000 crore which will be used to upgrade the refinery to process cheaper, high-sulphur crude to improve margins and products.
The refinery has a refining capacity of 9.5 million tonnes per annum (MTPA), producing Euro-III/IV compliant auto-fuels and various other Petroleum Products which will now be enhanced to 15.5 MTPA. by 2015.
A release issued by Kochi refinery said, "With the demand of petroleum products increasing, refining capacity of the Nation has to be enhanced periodically. The expansion plan is an effort to meet country's growing energy needs and make auto-fuels more environment friendly."
The state-run refiner has earlier said that it plans to produce polymer-grade propylene from the project which will be used as a feedstock for a series of niche petrochemicals.
BPCL will also get monetary concession from the state government which includes payment of tax dues from BPCL's products which will be given back to the company as soft loan.
Also, Indian refiners want to ramp up exports as local sales of fuels at subsidised prices are impacting their margins and driving up local fuel demand.
The International Energy Agency said in its latest report India's fuel demand could rise 3.2 percent in 2012, led by diesel.