The Economic Times

India adds another feather to its cap, to become refining hub

March 24, 2006

New Delhi: India may turn out to be the refining hub of the Asia-Pacific region in the 'golden refining era'. Large refining capacities are set to roll out in the next few years with at least five major oil companies planning to either expand or set up greenfield capacities in the country.

While Reliance Industries is setting up the largest capacity at Jamnagar, other serious players include Essar, BPCL, MRPL and IOC among others.

The first to go off the block will be Essar Oil’s 7mn tonne refinery at Vadinar to be commissioned by July this year. BPCL is expected to commission its 6mn tonne Bina refinery by the end of ’09.

The refinery being set up by Essar Oil will have a capacity of 7mn tonnes to begin with. It will be increased to 10.5m tonnes by January ’07. The refinery involving a cost of around Rs 9,900 crore is expected to produce between 10.5 and 12mn tonnes of processed products per annum.

Globally, this period is being referred to as the golden era for the refining industry as margins for refineries have been at an all-time high. Upcoming Indian refineries are expected to be reap huge benefits due to the demand -supply gap leading to high refining margins.

The company plans to produce middle distillates like superior kerosene oil and high speed diesel, the two products that account for over 60% of the total demand for petroleum products in India.

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