India's Bharat Petroleum plans $3 bln petchem plant near Mumbai
28/03/2018 11:51
By Promit Mukherjee and Nidhi Verma
MUMBAI, March 28 (Reuters) - India's Bharat Petroleum
Corporation Ltd (BPCL) plans to build a $3 billion petrochemical
unit to serve the Mumbai region, a company official said, to
profit from the country's expected surge in demand for
petrochemicals as its economy expands.
BPCL's expansion is part of a national plan to spend $35
billion on petrochemical production in order to meet the
expected increase in consumption of the chemicals for products
including plastics, paints and adhesives. India currently only
produces about 20 million tonnes a year of petrochemicals, less
than the 40 million tonnes of demand expected for the 2017/18
financial year.
Demand is expected to almost double again within a decade,
according to a report from the Ministry of Petroleum and Natural
Gas.
BPCL earlier this month bought 500 acres (202 hectares) of
land from a fertiliser unit of Hindustan Organic Chemicals Ltd
HOCL.BO , Hindustan Organic said in a notice to the Bombay
Stock Exchange on March 17.
The land will allow BPCL to build a petrochemical complex
that will use feedstocks from its Mumbai refinery, which
processes 240,000 barrels per day (bpd) of crude, R.
Ramachandran, head of refineries at BPCL BPCL.NS told Reuters
this week. The site is about 60 km (37 miles) from the refinery.
"This (land deal) is fundamental to enhancing our
petrochemical portfolio," said Ramachandran. "Going forward,
petchem consumption is likely to be higher than the conventional
fuels so it is better if we start thinking in that direction
now."
To transport feedstock to the new petrochemical complex,
Ramachandran said there was a plan to build a pipeline from the
refinery to a nearby port and tankers would then deliver the
feedstock to the facility.
Alternatively, he said a direct pipeline between the Mumbai
refinery and the petrochemical facility could be built.
He said the facility would focus on producing propylene, but
also produce polyethylene at lower quantities.
Ramachandran told Reuters the company had not been able to
expand the Mumbai refinery for the petrochemical site because of
limited land availability in the city.
The petrochemical complex will be ready by 2023, he said.
BPCL plans to pump feedstocks from the Mumbai refinery by
pipeline to a nearby port to load onto tankers that will then
carry it to the petrochemical complex, said a source familiar
with the matter.
BPCL already produces petrochemicals at its 310,000 bpd
Kochi refinery in southern India.
BPCL is also constructing a 52 billion rupees ($799.26
million) project at Kochi to produce chemicals like acryl,
oxo-alcohols, and acrylic acid used in products like paints,
adhesives or textiles, which Ramachandran said would be
commissioned next year.
BPCL also plans to build a petrochemical plant at its
120,000 bpd Bina refinery in central India.
"We are targeting petrochemical production equivalent to 10
to 15 percent of our crude processing in the long run," he said.
($1 = 65.0600 Indian rupees)
(Reporting by Promit Mukherjee and Nidhi Verma
Editing by Henning Gloystein and Christian Schmollinger)
((promit.mukherjee@thomsonreuters.com; +91-22-6180-7516;
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