BPCL picks Andhra Pradesh for India’s last greenfield refinery project

BPCL picks Andhra Pradesh for India’s last greenfield refinery project

State-owned Bharat Petroleum Corporation Ltd (BPCL) has picked Andhra Pradesh for setting up a new oil refinery-cum-petrochemical complex, which may be the last greenfield project in India, which has detailed a very ambitious energy transition plan to net zero emissions.

In a stock exchange filing, BPCL said its board at a meeting on Tuesday “accorded its approval to commence pre-project activities for setting up of a greenfield refinery cum petrochemical complex in east coast at Andhra Pradesh at an estimated cost of 6,100 crore”.

The pre-project activities include initial studies, land identification, and acquisition, preparation of a detailed feasibility report, environment impact assessment, basic design engineering package, and front-end engineering design, it said.

While the firm did not reveal the capacity or the timelines for completing the project, the refinery could have at least 9 million tonnes (180,000 barrels per day) in capacity.

BPCL is India’s third largest oil refiner behind state-owned Indian Oil Corporation (IOC) and Reliance Industries Ltd. It currently owns refineries at Mumbai (12 million tonnes a year capacity), Kochi in Kerala (15.5 million tonnes) and Bina in Madhya Pradesh (7.8 million tonnes). It had lost a fourth oil refinery to Oil India Ltd in the aborted privatisation plan.

BPCL had to give up its Numaligarh refinery in Assam to Oil India Ltd when the government was attempting to privatise the company. The transfer was to keep the Numaligarh unit within the public sector to honour the Assam Accord. But BPCL privatisation was aborted due to lack of interest by bidders.

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The planned unit in Andhra Pradesh is being touted as India’s last greenfield refinery project. BPCL is part of a consortium that is pursuing a 60 million-tonnes-a-year refinery-cum-petrochemical complex along the west coast in Maharashtra — it was conceived six years ago but has yet to get off the drawing board due to land acquisition issues.

India — the world’s third largest oil consuming and importing nation — has a refining capacity of 256.8 million tonnes (MT) and publicly announced plans for expanding current units and a near-complete 9MT HPCL facility at Barmer in Rajasthan will take it to 300MT by the end of the decade.

India’s nearly two dozen refineries produced 276.1MT of fuel in 2023-24 fiscal, while domestic consumption was 234.3MT. The rest of the products were exported.

It is being said that the planned expansion, as well as the new unit at Barmer (likely to be commissioned next year) and the one BPCL is now looking at building on the Andhra coastline, will be sufficient to meet India’s fuel demand till at least 2040.

During this period, the country is also aggressively pursuing clean energy projects including green hydrogen which will shift a bulk of energy demand especially in the transport sector to electricity (EVs) or gas (CNG/LNG) or green hydrogen.

India has set 2070 as the target date to achieve net zero carbon emissions.

BPCL has lined up 1.7 lakh crore of investment for expanding its core oil refining and fuel retailing business and in new energy ventures.

“To meet the anticipated demand beyond our planned expansions in Bina and Kochi (refineries), we are actively evaluating options for setting up additional integrated refining and petrochemical capacities in the next 5-7 years,” Chairman G Krishnakumar had stated at the company’s annual shareholder meeting on August 30.

Building on a strong Indian energy presence, BPCL aspires to meet 7-10% of the nation’s primary energy demand by 2047.

BPCL is targeting net-zero carbon emissions by 2040 by investing 1 lakh crore in renewable power, green hydrogen, compressed biogas, carbon capture, utilisation, and storage (CCUS), energy efficiency improvements, and carbon offsets.

The company has set aggressive targets to build 2 GW of renewable energy capacity by 2025 and 10 GW by 2035.

It is investing nearly 1,000 crore to establish two 50MW captive wind power plants in Maharashtra and Madhya Pradesh and is also investing about 300 crore in 72MWp of solar projects in Prayagraj, Uttar Pradesh.

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