BPCL to Invest $11 Billion in South India's New Refinery Project

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Posted by admin on 2025-01-15 08:32:28 |

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India's Bharat Petroleum CorporationLimited (BPCL) is planning to invest $11 billion in a new refinery andpetrochemical project in the southern state of Andhra Pradesh. This initiativeaims to address the rising fuel demand in India, the world's fastest-growingmajor economy. BPCL's chairman, G. Krishnakumar, emphasized the significantopportunity in the refining sector, noting that India's energy demand isexpected to grow three to four times as the economy expands.

India has ambitions to become a globalrefining hub, especially as Western companies scale back crude processing dueto the energy transition. BPCL’s proposed project, which includes a refinerywith a capacity of 9 million metric tons per year (tpy) and an ethylenecracker, will cost between 900 billion and 950 billion rupees ($10.56billion–$11.14 billion). The refinery will have a 35% focus on petrochemicalsand will primarily supply southern India, where there is growing demand fromthe petrochemical and automotive sectors.

BPCL currently operates three refinerieswith a combined capacity of 35.3 million tpy and sources additional fuel fromthe Numaligarh refinery in the northeast. The expansion is part of BPCL’sstrategy to reduce reliance on fuel purchases from external suppliers, as itbuys a fifth of the 50 million tpy of refined fuels sold at its retailstations.

In addition to its refinery expansion,BPCL is exploring a joint venture with the state-run Oil and Natural GasCorporation (ONGC) to set up another refinery in northern Uttar Pradesh state.The company is also pursuing its clean energy goals, targeting 10 gigawatts ofrenewable energy projects by 2035, and has formed a joint venture with Sembcorpto expand its renewable energy portfolio.

BPCL is also part of a $20 billionliquefied natural gas (LNG) project in Mozambique, led by TotalEnergies, withoperations expected to start in early 2025 and gas monetization slated for2028-29. BPCL holds a 30% stake in the Mozambique project, alongside otherIndian companies.

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