NEW DELHI Indian state oil refiners are drawing up a plan to build a major new refinery on the country's west coast to meet growing local demand and also to supply overseas markets, Sanjiv Singh, head of refining at Indian Oil Corp, said on Wednesday.
India is seen as the most important driver of energy demand growth in the world in the years to come with its oil consumption seen rising by 6 million barrels per day (bpd) to about 10 million bpd by 2040, according to the International Energy Agency (IEA).
The IEA estimates India's refining capacity, the fourth biggest in the world, would lag local fuel demand going forward, necessitating investment in more plants.
The new refinery will be bigger than 300,000 bpd in crude throughput capacity and will be built in phases, Singh said, adding a feasibility study on costing and size has yet to be commissioned.
"It will definitely be a large refinery ... The refinery won't come in a single stage. It will come in various stages," he told reporters.
He said the project would also incorporate a petrochemical complex to make it profitable as refining alone was a relatively low-margin business.
If it goes ahead it would be the first joint refinery project by the three competing state-controlled firms - IOC, Hindustan Petroleum Corp and Bharat Petroleum Corp.
Currently BPCL and HPCL operate refineries in western Maharashtra state but they have limited space for expansion.
In 2010 HPCL proposed building a 180,000 bpd refinery at Ratnagiri in Maharashtra but has not yet got environmental clearance for the scheme.
Singh did not say exactly where the new plant would be located but said it would suit imports from both the Middle East and Africa. Oil and gas minister Dharmendra Pradhan said last month the new refinery could be sited in Maharashtra.
In 2014 India's oil consumption totalled 3.8 million bpd compared with refining capacity of 4.3 million bpd. This does not include IOC's 300,000 bpd coastal refinery at Paradip in the eastern Odisha state, which was commissioned last year.
"If the new mega-refinery plan works out then we have to assess the viability of our Ratnagiri project," said a source at HPCL.
(Editing by Greg Mahlich)
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Updated Date: Jan 14, 2016 01:45:14 IST