Andhra Pradesh government has identified potential land parcels at three locations (Machilipatnam, Ramayapatnam, or Mulapeta) for the state-owned Bharat Petroleum Corporation Limited (BPCL)’s proposed refinery-cum-petrochemicals complex. The Economic Times reported.
The mega project will likely be set up at an estimated cost of Rs 70,000 crore.
Earlier last month, Chief Minister N. Chandrababu Naidu held talks with a delegation of BPCL led by its CMD G. Krishna Kumar regarding establishing an oil refinery and petrochemical corridor in the State.
During the meeting, CM Naidu requested the public sector energy behemoth to submit a detailed plan and feasibility report in 90 days. Naidu also said that the state government will expedite the process of identifying and handing over around 5,000 acres of land required for the project.
The commitment to setting up the refinery traces back to the Andhra Pradesh Reorganisation Act, of 2014. Section 93 of the Act specifically outlines provisions under the Thirteenth Schedule, stressing the establishment of a greenfield crude oil refinery and petrochemical complex in Andhra Pradesh by entities such as IOC or HPCL.
According to oil industry observers, the capacity of the integrated refinery complex in Andhra could be more than 9 million tonnes per annum (MTPA) with a petrochemical component attached to it.
Given the strategic location of the refinery on the east coast, the new refinery could play a key role in facilitating the smooth flow of crude oil imports and further exports of refined oil products.
India’s current refining capacity is 256.8 MTPA, which includes the 68 MPTA of Reliance at its Jamnagar facility, including the units in a special economic zone. To meet the growing oil demand, India plans to expand its refining capacity to about 450 MMTPA by 2030.
BPCL is India’s 2nd largest oil marketing company (OMC) with a market share of 25% during FY23. It is India’s 3rd largest refiner in terms of refining capacity (14.13 % of India’s refining capacity).
BPCL operates three refineries in Mumbai, Kochi, and Bina (Madhya Pradesh), with a combined annual refining capacity of around 36 MPTA.
BPCL’s strategy is to expand its refining capacity to 38.5 MTPA by 2028 and to 45 million MTPA by FY29 against the current capacity of around 35.3 million tonnes as of March 2024.
The oil major plans to invest around Rs 1,70, 000 crores over the next five years in its core businesses of oil refining, fuel marketing, petrochemicals, and clean energy. Of this total capital expenditure, Rs 75,000 crore is set to be allocated for refineries and petrochemical projects, Rs 8,000 crore for pipeline projects, and more than Rs 20,000 crore for marketing