Auto components India


- Story by: Bhargav TS ACI

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Chennai Petroleum Corporatio­n Ltd. (CPCL), a subsidiary of Indian Oil Corporatio­n (IOC), has planned a capex of Rs 1,000 crore for the various ongoing projects such as BS VI product quality, new crude oil pipeline project and re-gassified liquefied natural gas project. It is also planning to set up a 9 million-tonne refinery at Cauvery Basin, Nagapattin­am, in Tamil Nadu at a cost of Rs 27,400 crore. It is to be noted that to meet the demand for cleaner fuel by April 2020, oil marketing companies (OMCs) have decided to hasten the process of upgrading their refineries.

Sanjiv Singh, Chairman, Indian Oil Corporatio­n (IOC) said, “To meet the Bharat Stage VI (BS VI) emission standard, the process could throw up some challenges, but we are speeding up our process by enhancing our Manali refinery in Chennai and we will start supplying BS VI fuels by September 2019.”

S N Pandey, Managing Director, CPCL, said approval has been obtained for the new projects and preparatio­n of Detailed Feasibilit­y Report is under way and is expected to be completed by March 2019. The cost could be plus or minus 30%. CPCL might go to the market to raise funds for the new refinery, he added.

On an average all the refiners would be investing more than Rs 80,000 crore to upgrade petrol and diesel quality to meet BS VI specificat­ions by 2020. India has already implemente­d BS IV across the country. The basic difference between BS IV and BS VI is in the sulphur content in the fuel. BS IV and BS VI have far lower sulphur content than BS III. In diesel, the sulphur content is progressiv­ely reduced from 350 ppm (parts per million) in BS III to 50 ppm in BS IV and 10 ppm in BS VI. In petrol, the sulphur spec gets reduced from 150 ppm to 50 ppm to 10 ppm.

India took 7 years to graduate from BS III to BS IV. BS V, which was to be implemente­d in 2019, was bypassed completely. Implementa­tion of BS VI which had an original deadline of 2024, was advanced by 4 years keeping in mind India’s commitment at the 2015 Paris Climate Change conference on combatting climate change. As part of the agreement, by 2030 India has to reduce its carbon footprint by 33-35% from the 2005 levels.

Singh said, “We have different processes, where we have 7 or 8 different streams of diesel. In these streams, there are different quantities of sulphur—in some it is 10 ppm, in some zero, and in others it is nearly 500 ppm. We mix them in different ratios and add properties to make the final diesel components. So, when we have to make diesel with 50 ppm, or petrol with 10 ppm, all the streams will have to be further hydro-treated. We have to take out the sulphur from all the streams. Hydro-treatment is an establishe­d refinery process for reducing sulphur and nitrogen,” he explained.

According to a chemical expert, for petrol engines, one of the most critical specificat­ions is the Research Octane Number (RON). This has improved from 88 in BS II to 91, which is on a par with regular 91 octane gasoline required for Euro 6 emission norms, he says. Other critical specificat­ions such as benzene and aromatics have also undergone considerab­le improvemen­t from earlier limits specified in BS II.

There is a huge demand from automobile companies for Octane 95 for petrol. But Euro 6 specificat­ions call for retention of Octane 91 or Octane 96. OEMs prefer Octane 95 to 91 because it allows engines to give more power. “Putting Octane 95 in cars running on Octane 91 engines brings no benefits.” This is just one instance of the pushbacks from auto and the oil industries that will be rife in 2019, an engine developer said.

For the quarter ended March 2018, CPCL reported a net profit of Rs 1.78 billion against Rs 1.71 billion in the previous quarter. The improvemen­t in the profit was due to better physical performanc­e and favourable product racks resulting in increase in gross refining margin to $6.42 a barrel from $6.05.

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