Introduction:

The evolving dynamics of the petroleum and petrochemical industries reflect the intricate interplay of global trends, regional consumption patterns and emerging economic transitions. The energy demands are soaring due to industrialization, urbanization and growing infrastructure, thus countries like India are spearheading strategic investments to ensure energy security, support industrial growth and align with the sustainability goals. This article explores varied aspects that influence the petroleum demand, the shift toward petrochemical feedstocks, and the innovative projects redefining the industry such as BPCL’s ambitious refinery and petrochemical complex in Andhra Pradesh.

Breaking down some of the key aspects:

The demand for petroleum products such as petrol, diesel and feedstocks for petrochemicals are largely influenced by global trends, regional consumption patterns and economic transitions. Therefore, some aspects affect or influence the demand for these products. Analyzing them helps in understanding the key markets, and how the shift happens from transportation fuels to petrochemicals and sustains profitability.
 

Big news: Bharat Petroleum Corporation Limited(BPCL) is undertaking the development of India’s most expensive oil refinery and petrochemical complex in Andra Pradesh.

This is a greenfield project that is valued at approximately INR 95,000 crore and the project can also be considered as a part of BPCL’s broader strategy in meeting the domestic fuel demand that is expected to grow 4-5% annually. The refinery will have a capacity of 9 million tonnes per annum and the primary focus of the facility will be on producing fuels and petrochemicals that are essential for the country’s energy needs.

The project aims to be operational within 48 months of the final investment decision, which is also part of BPCL’s ambitious INR 1.7 lakh crore investment plant that includes enhancing refining capacities and entering new energy sectors. This initiative aligns with India’s energy transition goals and its growing petrochemical sector.

BPCL has not yet disclosed their plan related to exact capacity but will likely align with the country’s growing demand for refined fuels and petrochemicals. The investment is estimated at INR 6100 crore for the pre-project activities and early development. Refinery-cum petrochemical complex, integrating fuel production with advanced petrochemical capabilities to support diverse industries such as plastics, textiles and chemicals.

The strategic investment is by observing the growing energy demand which is about 4-5% due to rising population and urbanization, industrial growth and infrastructure development, increasing vehicle ownership and others. The current refining capacity is approximately 260 million tonnes per year and the target is to surpass 300 million tonnes per year to meet the future demand. Furthermore, the proximity to international trade routes for imports and exports and accessibility to the markets in southern and eastern India are contributing strong reasons for this strategic investment.

BPCL’s broader vision is to achieve net-zero carbon emissions by 2040 and INR 1 lakh crore investment in renewable power, green hydrogen, compressed biogas, and carbon capture. Furthermore the development of 2GW renewable energy capacity by 2025 and scaling up it to 10 GW by 2035.

BPCL’s Mumbai refinery is one of the oldest and most critical facilities in India. The expansion focuses on upgrading the refinery’s capacity and modernizing the equipment for energy efficiency with the environmental regulations. There are advanced technologies such as residue upgradation and hydrocracking units that help maximize fuel output and reduce emissions.

Do you know that India has a refining capacity of 256.8 million tonnes?  Yes, with the addition of HPCL’s Barmer refinery and BPCL’s proposed unit, the capacity is expected to reach 300 million tonnes by 2030. This capacity is sufficient to meet the fuel demand until at least 2040. The country’s oil demand grows at 4-5% annually.

Meanwhile, in 2023-2024, the country’s refineries produced about 276.1 million tonnes of fuel exceeding the domestic consumption of 234.3 million tonnes, and the surplus was exported. Alongside its refinery expansion, the country is advancing clean energy projects, which include green hydrogen, which could shift transportation energy demand towards electricity, CNG/LNG and hydrogen. Therefore the country aims to achieve net-zero carbon emissions by 2070.

Expansion of core refining business:

Here are some of the existing refineries: Mumbai refinery is one of the oldest and most critical refineries. The Bina refinery located in Madhya Pradesh is operated by Bharat Oman Refineries Limited (BORL), a subsidiary of BPCL. The expansion aims to increase the capacity from the current 7.8 million tonnes per annum to approximately 15 MTPA.

The enhancements include setting up additional crude distillation units, hydrocrackers and catalytic reformers to meet the growing demand in central India.

The Kochi refinery with the integrated petrochemical facilities is known for the production of propylene derivative and PDPP – Propylene Derivative Petrochemical Project, the project that produces specialty chemicals such as acrylic acid and acrylates. The increasing refining capacity from 9.5 MTPA to over 15 MTPA.

Focus on catering to southern India’s demand and exporting surplus products.

Rajasthan’s Barmer refinery holds a capacity of about 9 million tonnes per year and is worth about 71,814 crores. The refinery is a joint venture between Hindustan Petroleum Corporation Limited (HPCL) and the Rajasthan government. The facility features petrochemical integration and focuses on feedstocks such as polypropylene and benzene derivatives.

The Ratnagiri refinery and petrochemical complex has a proposed capacity of about 60 million tonnes per year and that makes it one of the largest refineries in the world. The cost of the refinery is INR 3 lakh crore and it has Saudi Aramco and ADNOC as key international partners. It balances the challenges of balancing industrial growth with landowner and community interests.

Although there are several opportunities for the refineries, consider some of these thought-provoking questions related to the context:
 

Final thoughts:

The Indian petroleum and petrochemical industries are a testament to the nation’s ability to adapt to changing global trends, and domestic demands. By integrating advanced technologies, expanding refining capacities, and embracing sustainability goals, the country is not only addressing energy needs but also contributing to the global energy transitions. BPCL’s initiatives along with strategic partnerships and investments. Thereby illustrating a forward-looking approach that balances the economic growth with the environmental stewardship.