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Indian Oil and partners sign $40-billion JV deal

June 15, 2017
Chemical Value Chain

India’s state-owned oil majors, Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp., on Wednesday signed an agreement to build one of the world’s largest integrated refinery-petrochemicals complexes in Ratnagiri district of Maharashtra.

The joint venture (JV) agreement for the west coast refinery project was signed in New Delhi by Sanjiv Singh, chairman of Indian Oil; D Rajkumar, managing director of Bharat Petroleum; and MK Surana, chairman of Hindustan Petroleum in the presence of Dharmendra Pradhan, India’s oil minister.

The 60 million-metric tons/year (MMt/y) west coast refinery complex will be built at an estimated cost of $40 billion, and is expected to be commissioned by 2022. It will be a greenfield refinery with 50 units and will be self-sufficient in power and utilities.

Designed to produce Euro-VI and above grade transportation fuels, the refinery will have in-built flexibility for processing a wide spectrum of light and heavy crude oil grades, utilizing various blending techniques. It will also be able to produce an on-demand product mix of petrol and diesel streams, as well as other refined products and petrochemical streams with the highest level of integration and energy efficiency, the JV partners say.

The preliminary configuration study of the project is being carried out by Engineers India (New Delhi) in association with an international consultant. IHS Markit is carrying out the market study for the chemicals and petrochemicals part of the complex. Apart from the main refinery and petrochemicals complex, the viability of other associated industries in the vicinity of the project is also being examined.

Indian Oil will be the lead partner with 50% and Hindustan Petroleum and Bharat Petroleum will each hold 25%, Sanjiv Singh said. Speaking during the signing ceremony, the oil minister said that Saudi Aramco wants to enter into exclusive talks with India to buy a stake in the planned refinery.

Although India is the world’s third-largest energy consumer after the United States and China, its per capita energy consumption is a quarter of the world average, Pradhan said. “Domestic oil demand is likely to climb to 500 million tons by 2040. Against this, our domestic refining capacity currently is 230–235 million tons. We need to plan capacity addition to not just meet this demand but also of export markets,” he said. The refinery will include a mega petrochemical complex with aromatics facilities, a naphtha cracker, and polymer plants, Singh said. The refinery will have three crude units of 20 MMt/y each. The west coast refinery will have the advantage of easy access to sourcing crude oil from the Middle East, Africa, and South America.

By Natasha Alperowicz

Source: Chemical Week

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