India’s Bharat Petroleum Corp. has laid out a major expansion strategy that will see the state-owned refiner invest nearly $6.5 billion over the next few years to expand its footprint in petrochemicals, lubricants and renewables as it prepares for a changing energy landscape. .
Company sources said the move is part of a broader plan by all state-owned refineries that are now actively seeking to diversify their portfolio by increasing their petrochemical intensity to ensure the businesses remain relevant in the event vehicles electricity have a demand toll. for transport fuels.
“Bharat Petroleum is undergoing a strategic transformation to become a comprehensive energy conglomerate, moving away from its heavy reliance on transportation fuel sales. The company is making significant investments in chemicals, green energy and renewable fuels to diversify its product portfolio,” said Sumit Ritolia, senior oil analyst for South Asia at S&P Global Commodity Insights.
BPCL is an integrated energy company engaged in the refining of crude oil and marketing of petroleum products, with a significant presence in the upstream and downstream sectors.
BPCL’s refineries at Mumbai, Kochi and Bina Refinery have a combined annual refining capacity of about 35.3 million mt. Its marketing infrastructure includes a network of LPG facilities, depots, energy stations, aviation service stations and distributors. Its distribution network consists of over 21,000 power stations, over 6,200 LPG distributors, 525 lubricant distributors, 123 POL storage locations, 53 LPG bottling plants, 70 aviation service stations , four lubricant mixing plants and four pipelines across the country.
Petrochemical drives
“BPCL is further increasing the company’s footprints in the petrochemical and renewable energy segment along with increasing the marketing infrastructure,” the company said in a recent statement.
Of the various expansion projects that the company has decided to undertake, the main component of the expansion projects will be the ethylene cracking (EC) project, which will boost the production of essential petrochemicals.
The global expansion project will include the establishment of an EC complex, downstream petrochemical plants, as well as the expansion of the refinery’s existing 7.8 million mt (156,000 b/d) annual capacity to 11 million mt in its Bina refinery.
“The expansion of the Bina refinery will meet the growing demand for petroleum products in central and northern India while providing the required feedstock to the EC complex. The petrochemical plant will cater to the growing domestic demand for petrochemicals” , BPCL said.
According to S&P Global, BPCL is adopting an integrated refinery approach, where refining, petrochemical and specialty chemicals units are interconnected.
This integrated facility aims to improve the sustainability and stability of the refinery’s operations, as well as reduce its vulnerability to global events and fluctuations in demand for certain fuels.
“By integrating the refinery with a petrochemical complex, the company can also generate high-value products and improve gross margins. This integration acts as a safeguard, insulating BPCL’s margins from volatile global market conditions,” Ritolia added.
In addition, BPCL plans to set up Petroleum Oil Lubricants (POL) and Lubricating Oil Base Stock (LOBS) facilities with receiving pipelines at Rasayani in Maharashtra at a project cost of about 27,000 crores of rupees ($327 million). This project aims to increase storage capacity, smooth the supply chain and streamline the distribution of petroleum products.
Footprint of renewables
In its quest to increase its renewable energy footprint, the company also plans to set up two 50 MW wind power plants in the states of Madhya Pradesh and Maharashtra for captive consumption at the Bina and Mumbai refineries respectively. With a total project cost of approximately 9.8 billion rupees ($119 million), these wind farms will contribute to greener and greener operation, BPCL said.
“BPCL has taken a leap into the world of petrochemicals as we embark on the Rs 490 billion ($5.94 billion) Ethylene Cracking Project at our Bina Refinery, in step of capacity expansion of refining to 11 million mt/year.Combined with our investment in wind power and new-age petroleum lubricants facilities built for sustainable processes, this is a key moment in our strategic effort to be in the forefront to meet the rapidly growing demand for energy and petrochemical products in India,” BPCL said. chairman and managing director G. Krishnakumar.
“We are steadfast in aligning our strategic imperatives with the government’s mission to make India a self-sufficient and globally competitive petrochemical powerhouse. These future-defining projects will generate employment opportunities and strengthen our capabilities sustainable energy, a step towards a secure and net zero future,” he added.
BPCL has also chalked out a plan to provide electric vehicle charging stations at around 7,000 power stations over the next five years. With a focus on sustainable solutions, the company is developing an ecosystem and roadmap to become a net-zero energy company by 2040, in Scope 1 and Scope 2 emissions, BPCL said.
“Through a dual approach of expanding its presence in the refining and petrochemical sector, while investing in renewables, biofuels and new energy, BPCL aims to strike a balance between traditional and sustainable energy sources,” he added Ritolia
Source: Platts
