India's BPCL plans refinery expansion

KUALA LUMPUR: India's Bharat Petroleum Corp plans to add 170,000 barrels per day (bpd) in refining capacity through expansion at both its Kochi and Bina plants, Chief Executive R.K. Singh told reporters on Sunday.

The expansion will cost BPCL around 180 billion rupees, he said.

India's fuel demand is growing quickly with the expanding economy, and subsidised prices mean have sheltered consumers from the rally in international oil prices to over $100 a barrel this year.

Diesel demand would grow by around 8-10 percent this year, but the country should avoid the need to import the fuel if all refineries run without glitches, Singh said.

"If all the refineries are running, there is no turnaround or no technical hitch in the operation of the refineries, I don't think imports are necessary," Singh said.

BPCL plans to expand the Kochi refinery to 300,000 bpd from 190,000 bpd, Singh said. The company plans to boost capacity at the Bina refinery to 180,000 bpd from 120,000 bpd, he added.

BPCL is in the midst of starting up the new Bina plant, and expects the refinery to reach capacity of 120,000 bpd in the next three months, Singh said.

At Kochi, the company was also planning a fluid catalytic cracking unit, he added.

"We're thinking of putting a petrochemical complex there," he said. "It will be petrochemical products based on propylene. So we'll have to add additional FCC there which will give us propylene."

Profit margins for refining crude were good, he said, pegging the spread between crude and the principal fuels produced through refining at $18-$20 a barrel.

Copyright Reuters, 2011