HPCL plans $3.3bn upgrade of two refineries

Vol 19, PW 25 (25 Aug 16) Midstream & Downstream

Brimming with confidence, Hindustan Petroleum looks set to meet the government's deadline to begin producing eco-friendly Euro-VI standard fuel by April 1, 2020.

This report learns the Mumbai-based refiner wants to invite bids after November 2016 to upgrade facilities and increase capacity at its refineries in Mumbai and Vizag at an estimated cost of Rs22,000cr ($3.3bn). With luck the contracts will be awarded around March-April 2017 to coincide with the next fiscal start and project completion expected within three years.

At Vizag HPCL plans to spend Rs18,000cr ($2.7bn) to modernise the refinery and expand capacity from 8.33m t/y to 15m t/y. At present HPCL is believed to be at an advanced stage of selecting licensors or technology providers after consultant Engineers India submitted its recommendations in July.

Still undecided is which model to follow: only the 'EPC' route where the selected contractor manages the project from start to finish; or the 'conventional' route where HPCL selects the technology providers and provides equipment to the EPC contractor to install; or finally the licensor plus EPC route where the EPC contractor must liaise directly with the selected technology providers. Among processes slated for upgrade at Vizag are Naphtha Isomerisation, Slurry Hydrocracker, Solvent Deasphalting, Hydrocracker, Crude Distillation and Vacuum Distillation while the auxiliary units are Hydrogen Generation, Sulphur Recovery, and Amine Regeneration.