Indian Oil plans $2.4 B expansion of Gujarat refinery
NEW DELHI (Reuters) — India's top refiner Indian Oil Corp will spend $2.4 B to increase capacity at its refinery in western India by about a third over the next few years to meet rising local demand for fuel.
The plan, announced on Friday, will enable the plant in Gujarat state to process 360,000 bdp of oil by the end of 2021. It is part of IOC's vision to increase its refining capacity by about 89 percent to 3 MMbpd by 2030 by building new plants and expanding some existing ones.
The 274,000 bpd Koyali refinery, built in 1965, has five crude units and IOC wants to replace four of them with a single 300,000 bpd crude unit.
The $2.4 B expansion will also enable the Gujarat plant to process cheaper, tougher oil grades and improve profitability. The secondary units at the plant will be ready by the end of 2022, IOC said in a statement.
India has emerged as a bright spot amid soft demand for oil elsewhere in the world, but the South Asian nation's push to electric vehicles is forcing analysts to revise forecasts for fuel demand in the world's third biggest oil consumer.
The revamped plant will have the flexibility to withstand fluctuations in future demand and supply of fuels and to integrate with downstream petrochemical units, IOC Chairman Sanjiv Singh said.
The refiner is also setting up a 420,000 tpy polypropylene unit at the refinery.
IOC is bolstering its gas imports and retail business as well, as India seeks to increase cleaner fuel's share to 15% of the country's energy use in the next few years from 8% currently.
The company's board has approved a plan to buy up to a 50% stake in the 5 MMtpy Mundra LNG terminal on India's west coast.
The terminal, being set up by a joint venture between Gujarat State Petroleum and Adani Enterprises Ltd at a cost of about 50 B rupees, will start operations in the first quarter of next year.
IOC currently imports liquefied natural gas at Petronet LNG's west coast terminal for supplying to industries. It is also building a 5 MMtpy LNG terminal at Ennore on the east coast and hopes to commission the facility in 2018–2019.
Reporting by Nidhi Verma and Neha Dasgupta; Editing by Susan Fenton
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