India Boosting Refinery Expansion Plan
Indian Oil Corp. is scaling up an expansion plan for its biggest refinery in northern India at a cost of $2.3 billion, as it races to meet demand in one of the world’s fastest-growing crude consumers.
India’s largest refiner will expand its Panipat refinery to 500,000 barrels per day from the current 300,000 bpd, according to Sanjiv Singh, director of refineries. The state-run processor previously planned to boost capacity to 400,000 bpd, Bloomberg reported.
“Fuel demand growth has been very strong and India’s excess capacity is very small,” Singh said in New Delhi. “We have to keep adding capacities.”
Increased use of trucks, cars and motorbikes spurred by rapid economic expansion has made the world’s second-most populous nation a bright spot for global oil demand, drawing interest from Saudi Aramco to Rosneft PJSC. Local refiners are racing to add capacity amid rising fuel consumption.
India’s fuel consumption rose about 11% last year, surpassing China’s growth of 7%, making the South Asian nation the biggest driver of global energy demand, Kapil Dev Tripathi, the top bureaucrat in India’s Oil Ministry, said Monday.
Indian Oil plans to spend $30 billion through 2022 to expand its refining, pipelines and distribution infrastructure. The state-run refiner will add annual capacity of 500,000 bpd to its existing refineries over the next six years, Chairman B. Ashok said last month. Indian Oil last week said it would spend about $1.2 billion to increase the capacity of its Barauni plant in eastern India by 50%, along with a petrochemical unit.
“Next, we will take up expansion of Panipat, Gujarat and Mathura refineries,” Singh said. “The Panipat expansion would take about 42 months to complete after the project is approved.”
Indian Oil can currently process 1.8 million barrels of crude a year from its nine plants and two owned by its unit Chennai Petroleum Corp. It accounts for 35% of the nation’s total output, according to its website.