Expect more Euro-III petrol from HPCL expansion

Vol 10, PW 1 (04 May 06) Midstream & Downstream

Hindustan Petroleum is the latest refiner to embark on an expansion of its refining capacity a move that will consolidate Indias growing position as a regional refining hub with surplus capacity.

PETROWATCH learns that by December this year HPCLs 5.5m-t/y (105,000 b/d) refinery in Mumbai will be ready to process 7.9m t/y (151,000 b/d) much of it in the form of new lines of regular and premium grades of petrol. Actual production of the new higher capacity designed 7.9m t/y refinery will only begin between April and June next year - several months after the capacity expansion is commissioned.

Company directors initially set aside Rs1852cr ($421m) for the expansion carried out in line with HPCLs Green Fuel and Emission Control Project - but we are told cost overruns will take the final bill to at least Rs2000cr ($455m). Construction of the refinery expansion will not come without disruption to existing production: the refinery will close for 35 days sometime between January and March next year to enable interconnection of the new expanded capacity with existing infrastructure.

HPCLs Mumbai refinery is already producing over capacity. Between April 2005 and March 2006 it pumped out a total of 6.3m tonnes of oil products.

With the expansion to 7.9m t/y the refinery will safely be able to produce 8.5m t/y, says a refinery official. Compliance with new Euro-III norms for petrol and diesel is the key driver behind HPCLs decision to expand capacity.

Already producing Euro-III grade diesel, the new refinerys focus will be to produce Euro-III grades of petrol and later graduate to production of Euro-IV. Under the expansion programme, HPCL is setting up a new naphtha splitter unit, hydro treater, catalytic reforming unit, isomerisation unit and fluid catalytic cracking gasoline hydro treater.

Pre-expansion Post-expansion Refinery Capacity 5.5m tonnes 7.9m tonnes Products LPG 148,900 tonnes 506,228 tonnes PROPYLENE 0 0 HEXANE 0 Gasoline 89 303,200 tonnes 0 Regular gasoline 0 620,207 tonnes Premium gasoline 0 507,815 tonnes SOL-1425 0 LAN 448,700 tonnes 317,910 tonnes HAN 322,800 tonnes 61,710 tonnes MTO 21,900 tonnes 21,900 tonnes ATF 507,300 tonnes 479,173 tonnes SKO 584,100 tonnes 584,000 tonnes HSD 1.774m tonnes 2.053m tonnes LDO 100,000 tonnes 100,000 tonnes IFO 1.105m tonnes 1.377m tonnes IFO export 0 37,947 tonnes LSHS 213,200 tonnes 127,071 tonnes Asphalt 325,000 tonnes 325,000 tonnes Sulphur 10,300 tonnes 25,898 tonnes