India's Chennai Petroleum to Implement $3.8 Billion of Projects at Manali Refinery

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Researched by Industrial Info Resources India (Delhi, India)--Chennai Petroleum Corporation Limited (BSE:500110) (CPCL) (Chennai, India), a part of Indian Oil Corporation Limited (BSE:530965) (IOCL) (New Delhi, India), is planning to undertake $3.8 billion worth of projects at its 240,000-barrel-per-day (BBL/d) Manali Refinery.

At present, the refinery is in the final stages of implementing a $581 million auto fuels project to produce gasoline and diesel meeting Euro IV specifications. The project consists of adding a new diesel hydrotreater, a hydrogen unit and utilities/offsites. It is expected to be fully commissioned by the first quarter of 2012.

Revamp work is being undertaken at the refiner's second crude distillation unit, which will increase throughput capacity from the current 83,000 BBL/d to 97,000 BBL/d. The project is being implemented at an estimated cost of $74 million and is expected to be completed by the third quarter of 2012.

In addition, a residue-upgrading project has been approved by CPCL management. The project will enable the refinery to process less expensive, higher sulfur-content crudes and produce higher-value distillates. The project will also produce petroleum coke, which is in high demand as a substitute for conventional fuels such as coal. The project encompasses revamp of its existing hydrocracker, and the addition of a new delayed coking unit and a new two-train sulfur recovery unit. The project cost is estimated to be $690 million and will be completed in 33 months.

Another project to replace the old 63,000-BBL/d Crude Distillation Unit 1 with a new 200,000 BBL/d crude unit is on the drawing board of the CPCL management. CPCL is currently finalizing the feasibility report and considering options for locating the project. The cost of the project has been pegged at $3.1 billion.

The Manali Refinery was installed in 1969 and had an initial capacity of 56,000 BBL/d. Over the years, two additional crude units were added, taking the total refining capacity to approximately 215,000 BBL/d. Chennai Petroleum Corporation Limited (CPCL), formerly known as Madras Refineries Limited (MRL), is presently owned by IOCL and Naftiran Intertrade Company Limited (Pully, Vaud).

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