MRPL shuts 2/3rd of refinery on water shortage

State-run Mangalore Refinery and Petrochemicals Ltd has shut about two-thirds of its 1,50,000 barrels per day (bpd) Karnataka refinery due to a water shortage, which may mean delays in unloading oil cargoes and product shortages.

A company source, however said, his firm would try to meet all export commitments. MRPL did not specify how long the shutdown might last.

The operations of MRPL, a subsidiary of Oil and Natural Gas Corp, were hit as local authorities initially reduced and then stopped water supply to the plant from the nearby Nethravathi river from Wednesday, it said in a stock exchange filing.

Water availability in the Nethravathi river and at its downstream dams started falling from end-March, it said. "Water is critical for any refinery as steam is used in almost every stage of the refining process. Also water is needed for cooling products before transfer to storage tanks," said BN Bankapur, former head of refineries at Indian Oil Corp, the country's biggest refiner.

MRPL said reserve water available at the refinery could meet full throttle use for a day and a half. "In order to overcome the situation ... it has been decided to shut down the Phase III and Phase II units with immediate effect," it said.

MRPL has three crude units -- Phase I of about 93,600 bpd, Phase II of about 142,800 bpd and Phase III of about 60,000 bpd -- and supplies oil products mostly to demand in southern India.

"There will be a shortage of supply of products to MRPL fed locations. Further, we may have to incur additional demurrage on account of delay in unloading crudes because of ullage problems and loading of products," it said.