BPCL planning 5m t/y Numaligarh expansion

Vol 15, PW 20 (19 Apr 12) Midstream & Downstream

Assam-based Numaligarh Refineries plans to expand capacity at its 3m t/y refinery to 8m t/y, unfazed by reports that separatist militants were behind a massive fire there earlier this month (April).

On March 17, Bharat Petroleum subsidiary Numaligarh hired state-owned Engineers India (EIL) to prepare a Techno Economic Feasibility Report on the proposed expansion of the refinery located in Golaghat district. EIL must submit its report by mid-November.

“Petroleum product demand in the northeast is growing,” says a Numaligarh source, “especially demand for high speed diesel and motor spirit (petrol).” Numaligarh’s board has given in-principle approval for the expansion but will take a Final Investment Decision only after receiving EIL’s report.

EIL’s scope of work includes assessing technical configuration, the product slate, rate of return on investment and economic viability through a ‘sensitivity analysis’. Parent company BPCL presently buys and sells the following Numaligarh production: LPG, petrol, diesel, naphtha, kerosene, jet fuel, pet coke and raw pet coke.

“BPCL will continue to off-take these products from the expansion if we go ahead,” he adds. Numaligarh issued a tender in October last year to hire a feasibility report consultant.

“Only three companies, including EIL, submitted bids by November 17,” we hear. “Foreign consultants aren’t attracted to tenders in the northeast.

That’s EIL territory.” Foreign companies were further discouraged as Numaligarh isn’t expected to offer a Lump Sum Turn Key contract for the expansion, opting instead to package it as an EPC project, with multiple contractors.

Even EIL’s competitive bid was a pleasant surprise. “Normally we ‘request’ EIL to bid,” he jokes.

“I think they’re short of work.”