Technip Secures $720 Million Construction Contract for Hindustan Petroleum's Vizag Refinery Upgrade

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Leading process engineering company Technip KTI SpA (Rome, Italy) has secured a $720 million lump-sum turnkey contract to construct a hydrogen generation unit (HGU) and a diesel hydro-treater (DHT) unit for Hindustan Petroleum Company Limited (BSE:500104) (HPCL) (Mumbai).

The DHT and HGU facilities will be constructed at HPCL's refinery at Vishakhapatnam in Andhra Pradesh. HPCL also has invited tenders for the development of a sulfur block. Project officials have indicated that the contract for the sulfur block will be awarded shortly.

Technip KTI, which is 25% owned by Technip SA (OTC:TKPPY) (Paris, France), has three decades of experience in process engineering in the chemicals, refining and petrochemicals sectors. The company specializes in heat-transfer systems, gas processing, and hydrogen and sulfur recovery processes.

Construction of the HGU, DHT and the sulfur block is expected to help HPCL adhere to the Euro-IV diesel fuel specifications. The Auto Fuel Policy makes it mandatory for all metro cities in India to follow the Euro-IV fuel norms by 2010. HPCL has embarked on a program to upgrade its 7.5 million-ton-per-year refinery at Vishakhapatnam and the 5.5 million-ton-per-year refinery at Mumbai to produce and supply Euro-IV high-speed diesel (HSD) and motor spirit.

The company has appointed Toyo Engineering Corporation (TYO:6330) (Tokyo, Japan) as management consultants for the project. Universal Oil Products LLC (UOP) (Des Plaines, Illinois) has licensed the process and engineering technology. UOP, a fully owned subsidiary of Honeywell International (NYSE:HON) (Morristown, New Jersey), is a full-spectrum refining and process technology licensing company that focuses on providing state-of-the-art technology licenses for hydrogen recovery. The refining industry's drive to reduce sulfur content in diesel and gasoline has made the recovery of hydrogen crucial. Production of low-sulfur fuel has increased the requirement of high-grade hydrogen. UOP helps companies study their hydrogen production, and identify processes and technology to recover larger quantities of hydrogen.

The augmentation project at Vishakhapatnam includes the 36,000-ton-per-year HGU; the 2.2 million-ton-per-year DHT facility; a sulfur recovery unit; an amine regeneration unit; a two-stage, sour-water-stripping unit; and fuel-gas-desulfurization units.

According to reports, HPCL also has placed orders with Larsen & Toubro Limited (BSE:500510) (L&T) (Mumbai) to procure two reactors. L&T is scheduled to deliver the reactors by early 2011. Hitachi Corporation (NYSE:HIT) (Tokyo) has secured the contract for supply of feed pumps and make-up and recycled gas compressors.

In a related development, HPCL's $10 billion expansion program of the Vishakhapatnam refinery is facing uncertainty, after Total SA (NYSE:TOT) (Paris) decided to withdraw from the project. HPCL is proposing to construct a 1 million-ton-per-year petrochemical complex and a 14 million-ton-per-year refinery, adjacent to the existing 7.5 million-ton-per-year refinery. Earlier, Mittal Energy Investment Private Limited (Singapore) had decided to pull out of the project. Oil India Limited (OIL) (Noida, Uttar Pradesh) and GAIL India Limited (BSE:532155) (New Delhi) are the other partners in this venture.

HPCL, a Fortune 500 company, recorded a turnover of $24.19 billion in 2008-09. HPCL also holds a 16.95% stake in Mangalore Refinery and Petrochemicals Limited (BSE:500109) (MRPL) (Mangalore, Karnataka), which operates a 9 million-ton-per-year refinery at Mangalore. HPCL recently acquired a 2.5% stake in OIL for $116.7 million.

View Project Report - 089001077 089001078 089001086 089001087 089001107 089001108

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.