Bharat Petroleum Corporation (BPCL) has unveiled plans to invest $11bn in a refinery and petrochemical complex in the southern Indian state of Andhra Pradesh.
BPCL chairman G Krishnakumar said the new refinery project is aimed at addressing the surging fuel demand in India.
The project will include a refinery with a capacity of at least nine million metric tonnes per year (mtpy) and an ethylene cracker. The refinery, which is expected to cost around INR900bn-INR950bn ($10.5bn-$11.11 bn), will feature a petrochemical intensity of 35%.
This initiative will cater to the growing demand for petrochemical products in the region, which is home to several industrial sectors, including automobile manufacturing and petrochemical developers.
Around 80% of the output from the proposed facility will be marketed in southern India.
Krishnakumar has been quoted by Reuters as saying: “We feel there is a big opportunity in refining sector. India’s primary energy demand itself is also going to increase three to four times as its economy expands.”
Preliminary work on the refinery and petrochemical project, such as land acquisition, has already begun.
The investment is part of BPCL’s strategy to expand its refining capacity and strengthen its footprint in the petrochemical sector as India’s per capita consumption of petrochemicals is expected to rise with increasing manufacturing activity.
Currently, BPCL operates three refineries in India with a combined capacity of 35.3mtpy.
The company also procures refined fuels from the Numaligarh refinery in northeastern India, which has a capacity of 3mtpy.
Expanding refining capabilities will help BPCL reduce its reliance on fuel purchases from other companies, which currently account for 20% of the 50mtpy of refined fuels sold through its retail outlets.
Besides, BPCL expects the $20bn Mozambique liquefied natural gas (LNG) project, led by TotalEnergies, to commence operations in the first quarter of 2025. The project, where BPCL and other Indian firms collectively hold a 30% stake, aims to monetise gas by 2028-29.
In addition to expanding its refining operations, BPCL is intensifying efforts to achieve its clean energy targets. The company plans to bid for government renewable energy projects and may acquire firms to meet its goal of developing 10GW of renewable energy capacity by 2035.
BPCL has already partnered with Sembcorp to enhance its renewable energy portfolio, which currently stands at 300MW.
Furthermore, BPCL is exploring a potential joint venture with state-run Oil and Natural Gas Corporation (ONGC) to set up a refinery in Uttar Pradesh, northern India.
Last year BPCL announced plans to invest around INR490bn to expand the capacity of its Bina refinery in Madhya Pradesh.
