BPCL CMD G. Krishna Kumar meeting Chief Minister N. Chandrababu Naidu. File
| Photo Credit: The Hindu
State-owned Bharat Petroleum Corporation (BPCL) has got Board approval to commence pre-project activities for setting up of a greenfield refinery-cum-petrochemical complex in coastal Andhra Pradesh at an estimated cost of ₹6,100 crore.
The pre-project activities consists of various initial studies, land identification and acquisition, preparation of detailed feasibility report, environment impact assessment, basic design engineering package and front-end engineering design, BPCL said in a filing after the Board meeting on Tuesday (December 24).
The development assumes significance for the company that is keen on enhancing its refining capacity as well as for Andhra Pradesh where Chief Minister N. Chandrababu Naidu had been pitching for the project ever since his Telugu Desam Party romped home in the Assembly elections earlier this year.
BPCL leadership had during investor calls highlighted how as part of an emphasis to add new refining capacity as well as grow the petrochemicals portfolio the company was continuously exploring new opportunities and evaluating various options, including forging partnerships, for new projects.
The need for new capacities is triggered by a gap between BPCL’s refinery throughput and sales. In FY24, the crude throughput was 39.9 million tonne while sales stood at 51.04 MT. The company has three refineries in Mumbai (12 MTPA); Kochi (15.5 MTPA); and Bina (7.8 MTPA). At the time of divesting stake in the 3.1 MTPA Numaligarh refinery, it retained 100% product marketing rights.
Towards meeting the customer demand, BPCL resorts to purchasing around 5 MT from private refineries, around 2 MT from the Numaligarh Refinery and a little over 3 MT from other standalone refineries every year. The gap between the refinery output and sales is only expected to widen in the backdrop of growing customer demand.
On the petrochemicals front, BPCL wants to take the share of the portfolio from existing 1% to 6-7% in the new term. As a long term diversification, the plan is to take petrochemicals portfolio share to at least 15% of the product sales.
Though BPCL is yet to specify the capacity, timelines and location as also the cost of the proposed project in Andhra Pradesh, Nellore Member of Parliament Vemireddy Prabhakar Reddy had told a gathering in October that the company would soon be investing ₹50,000-60,000 crore to set up an integrated refinery-cum-petrochemicals complex at Ramayapatnam Port in SPSR Nellore district.
The State government is understood to have offered three sites for the project in Machilipatnam (Krishna district), Ramayapatnam (Nellore district) and Mulapeta (Srikakulam district). The company is likely to build a complex in 1,000-acre with a capacity of 12 million tonnes per annum, a report on the MP’s programme said.
In July, after a BPCL leadership team called on him, Mr.Chandrababu Naidu in a social media post said: “strategically placed on the eastern coast, our State has a significant petrochemical potential. Today, I met with BPCL representatives… we explored establishment of an oil refinery and petrochemical complex in Andhra Pradesh with an investment of ₹60-70,000 crore. I have sought a detailed plan and feasibility report in 90 days. About 5,000 acres will be required for this project, which the government looks forward to facilitating in a hassle-free manner.”
Published – December 24, 2024 05:26 pm IST
