BPCL to expand Kochi refinery by 63%
The 5 week consolidation from the highs of 5600 to the recent lows of 5150 has formed a good base and now markets should trend higher as money flows resume into “Riskier asset” classes.
Bharat Petroleum has said that it will expand its Kochi refinery by 63 per cent, slightly higher than previously planned, by December 2015 and upgrade the refinery to process cheaper, high-sulphur crude to improve margins and products.
The Rs 142.25 billion expansion and upgradation project will see the southern India-based refinery processing 310,000 barrels per day (bpd), India's second-biggest state-run refiner said in a stock exchange filing on Friday.
BPCL had initially planned to raise the capacity of its 190,000 bpd Kochi refinery capacity to 300,000 bpd by March 2015.
Refiners in Indian and other emerging markets are boosting capacity to feed rising regional demand, while their counterparts in the United States and Europe restructure or shut plants on sluggish economic growth and weakening global demand.
BPCL said it expects to get environmental clearance for the project in the latter part of 2012.
The company said it also plans to produce polymer-grade propylene from the project which will be used as a feedstock for a series of niche petrochemicals.
Indian refiners want to ramp up exports as local sales of fuels at subsidised prices are impacting their margins and driving up local fuel demand.
Private refiners, which do not get compensation from the federal government for selling fuel at subsidised rates, prefer to export fuel.
The International Energy Agency said in its latest report India's fuel demand could rise 3.2 percent in 2012, led by diesel.
BPCL plans to boost capacity at the Bina refinery in central India to 180,000 bpd from 120,000 bpd. It also operates a 240,000-bpd refinery in Mumbai and has a majority stake in a 60,000 bpd refinery in northeast India.
Copyright @Thomson Reuters 2012
