Hindu Business Line (India): India has refining capacity of additional 30 mt: Shell Global: Posted Friday 6 January 2006

Richa Mishra

New Delhi , Jan. 5

SHELL Global, which was commissioned to do a detailed feasibility study on making India an investment destination for refiners, in particular export-oriented units, has suggested that India has the refining capacity of 30 million tonnes over and above the existing and planned projects.

Shell Global has also proposed that any scope of refinery should be linked to petrochemical production facility, which could be sold in India. Further, the refinery and petrochemical projects would require tax and fiscal concessions, sources said. Asked, since these would be export-oriented units, what kind of concessions they would be looking for, the sources said that though they would be EOUs, since they would be catering to the domestic market, they would require to be examined in this context.

Noting that India has already established itself as a net exporter of petroleum products with export earnings of over Rs 28,000 crore in 2004-05, Indian Oil Corporation was asked by the Petroleum Ministry to prepare a detailed feasibility study aimed at promoting India as the refining hub of South Asia and South-East Asia. IOC had roped in Shell Global to undertake the study.

Investment plans: The Petroleum Ministry proposed to work out an action plan for the investment purposes based on the feasibility study. It is likely to prepare a Cabinet note proposing the investment plans. The estimated export of petroleum products during 2005-06 is 13.305 million tonnes worth Rs 20,374 crore. Export earnings during the first quarter of 2005-06 amounted to Rs 8,962 crore.

The refining capacity as of April 2005 was 127.37 million tonnes per annum (mtpa). There were plans to enhance this capacity to 141.70 mtpa by the end of the Tenth Five-Year Plan (2006-07). The total capacity addition or expansion plans of about 14.33 mt will be by the oil companies such as Bharat Petroleum Corporation Ltd, IOC, and Hindustan Petroleum Corporation Ltd put together.

Apart from this, public sector oil companies have also proposed to set up four new refineries, completion of which is likely to spill over beyond the Tenth Plan. The new refineries are one each of IOC and HPCL and two of BPCL.

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