Bina Refinery Boosts BPCL's Refining Capacity

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Researched by Industrial Info Resources India (Delhi, India)--With the commissioning of the Bina Refinery, India's state-owned Bharat Petroleum Corporation Limited's (BSE: 500547) (BPCL) (New Delhi, India) refining capacity has increased to about 650,000 barrels per day (BBL/d). The 120,000 BBL/d refinery began commercial production on May 20.

BPCL had been refining approximately 525,000 BBL/d from the company's refineries in Mumbai, Kochi and Numaligarh, which have refining capacities of approximately 257,000 BBL/d; 203,000 BBL/d; and 64,000 BBL/d, respectively.

Nearly half of the Bina Refinery's output will be diesel. The facility will also produce 600,000 metric tonnes each of petrol and jet fuel.

The cost of the refinery saw a 20% escalation since it was first conceived in 2006. Originally, planned capital expenditure was $2.25 billion, which now stands at about $2.61 billion, primarily due to increases in the costs of raw materials.

The Bina Refinery project was proposed about 10 years ago, and it faced a major roadblock due to lack of environmental clearances. The delay in getting the requisite clearances took a toll on BPCL's joint venture partner Oman Oil Company (Muscat, Oman), which reportedly decided against any additional investment in the refinery, forcing BPCL to increase its stake in the project from 26% to 74%. Currently, BPCL holds 74%, while Oman Oil Company holds a 26% stake in the joint venture company, Bharat Oman Refineries, which owns the Bina refinery.

The Bina Refinery is designed to process Arab Mixed Crude (65% Arab Light and 35% Arab Heavy). It will also have the flexibility to process other types of Middle Eastern crudes, adopting state-of-the-art technologies.

Crude for this refinery is currently imported from Saudi Arabia. BPCL has contracted 3.75 million barrels of crude to start operations at the refinery. Bharat Oman Refineries has laid a 1,000-kilometer pipeline from Vadinar in Gujarat to transport the crude.

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