Govt looks to leapfrog in refining capacity by ’30

Capacity to rise by 77% to 439mt; RIL, Essar to lead pack; demand to hit 335 mt

India, the world's third-biggest oil consumer, plans to raise oil refining capacity by 77 per cent to 439 million tonnes by 2030 to meet the rising fuel demand, which is likely to more than double in the coming decades, Oil Minister Dharmendra Pradhan said on Thursday.

The expansion would be led by Reliance Industries and Russia's Rosneft-controlled Essar Oil, while the public sector oil companies together build a new 60 million tonnes (MT) a year refinery on the west coast.

India currently has a capacity to turn 247.6 MT of crude oil into fuel annually. This is slated to rise to 414.35 MT by 2025 and to 438.65 MT by 2030, Pradhan said referring to a report of the Working Group on Enhancing Refining Capacity.

The refining capacity exceeded the fuel demand of 193.74 MT in 2016-17, but the demand is likely to rise to 335 MT by 2030 and 472 MT by 2040.

International Energy Agency (IEA) forecast that India's fuel demand will reach 458 MT by 2040. India imports 80 per cent of its energy requirements and is planning ahead to cater to the rise in demand.

"We are planning so as we can meet the demand," Pradhan said, adding that brownfield expansion would add 120 MT capacity and new units in public sector would bring 69 MT capacity.

While it has no immediate plans to raise capacity for its 35.2 MT only-for-exports refinery, Reliance Industries' plans to raise its capacity of its older unit to 63 MT by 2030 from 33 MT.

Essar is looking to more than double capacity of its Vadinar refinery in Gujarat to 45 MT from 20 MT.

But the biggest single capacity addition would be when the planned 60 MT a year west coast refinery in Maharashtra comes on stream in 2025, the report said. State-owned Indian Oil

Corporation (IOC) plans to raise capacity from 80.7 MT to 116.55 MT with expansions at its Gujarat, Panipat, Paradip and Chennai refineries.

ONGC Group, which now includes Hindustan Petroleum Corporation (HPCL), plans to add about 20 MT to its existing capacity of 42.2 MT while Bharat Petroleum Corp Ltd (BPCL) would raise refining capacity to 56 MT from current 36.5 MT.

The world energy demand is expected to double in the next 30 years with energy portfolio undergoing a transition to one that includes a wide range of sources. This rise in demand would lead to gradual shift towards renewable and cleaner fuels richer in hydrogen or to neat hydrogen. India has leapfrogged from a modest 62 MT per annum refining capacity in 1998 to 232 MT at end of March 31, 2016.

The growth in refining capacity, which has made India a leading exporter of petroleum products since 2001-02, has been possible because of the de-licensing of petroleum refining by the government.

The report said RIL's domestic tariff area or DTA refinery capacity would be raised to 40.5 MT by 2025 and to 63 MT by 2030, from 33 MT currently.

Essar, on the other hand, would go to 45 MT from current 20 MT by 2020.