Hindustan Petroleum aims at 60 MM ton refining capacity by 2030
(Reuters) India's third biggest crude oil refiner, Hindustan Petroleum Corp. (HPCL), plans to expand its refining capacity to more than 60 MMtpy, or approximately 1.2 MMbpd by 2030, according to a senior company official.
This will help fill the yawning gap between the volume it refines and the volume it markets through its retail outlets, but also help in meeting the burgeoning fuel demand in the country, said HPCL Chairman Mukesh Kumar Surana.
While Hindustan Petroleum, which is largely known as a marketer of fuel products, currently sells 34.20 MMtpy of fuel products through its retail outlets and bulk sales, its refining capacity is only about half that.
According to a 2015 report by the International Energy Agency (IEA), India will require up to 329 MMtpy of oil products by 2030. As of last year India consumed 183 MM tons of fuel products, government data showed.
Analysts have often pointed out the heavy reliance on outside purchase of fuel products as a double-edged sword for the company. While HPCL is not directly exposed to crude oil fluctuations, it misses out on the refining margins that its peers clock.
"We would like to have 60 plus (MM tons) refining capacity by 2030," Surana said.
Separately, a company official said the internal target is to have not more than 15% reliance on outside purchase of fuel by 2030.
A major chunk of this refining capacity is expected to come from a joint venture project for a 60 MM ton proposed refinery in the western state of Maharashtra.
Hindustan Petroleum will own a 25% stake in this JV. India's biggest state-owned refiner Indian Oil and second largest player Bharat Petroleum will hold 50% and 25% stakes respectively.
India's Oil Minister Dharmendra Pradhan said in June that it would also like to bring in a strategic partner in the refinery and Saudi Arabia Oil has shown interest.
To meet the 60 MM ton target, the company will have to set up yet another greenfield refinery, HPCL's director of refineries, B K Namdeo, said.
Reporting by Promit Mukherjee; Editing by Sunil Nair
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