India's state oil refiners to invest US$35 bln into petrochemicals to meet an expected surge in demand


India's state oil refiners have been long focused on transport and cooking fuels as outputs. However, they - Indian Oil Corp (IOCL), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), are planning a US$35 bln impetus into petrochemicals to meet an expected surge in demand for goods as per Reuters. The drive comes as the government seeks to promote durable, cheaper materials in industries such as farming and food packaging, while refiners eye long-term threats to their business from renewable energy and a shift to electric vehicles.

India's per capita consumption of synthetic polymers, for instance, used to make various grades of plastics, is just 10 kg (22 lbs) a year, compared with a global average of about 32 kg. "India is one of the fastest growing economies globally, but our petrochemical use is one-fourth the world average. We import half of our petchem consumption," said S. Mitra, executive member at trade body, the Chemical and Petrochemical Manufacturing Association.

BPCL and HPCL will each spend about US$15 bln over five years to raise the industry's share of their total revenue to 10%, executives from both the companies said. IOCL will invest INR 300 million (US$4.7 bln) over the next 5-7 years, top executives said, boosting revenue from petrochemicals from a quarter to a third of total revenue. Together, the three firms plan to invest 2.7 trillion rupees ($42.3 billion) to build the world's biggest crude refinery with capacity of 1.2 million barrels per day (bpd) on the country's west coast, which will be linked to a petrochemical plant. Indian Oil also plans to expand its Panipat and Paradip petrochemical plants and build a new complex at it Koyali refiner.
HPCL, along with smaller refiner GAIL (India) Ltd, is building a 1.1 mln tpa petchem project in southern India, while BPCL plans a petrochemical complex at its Bina facility in central Madhya Pradesh state and is commissioning another at its Kochi facility in southern Kerala.
HPCL also plans to link a 2 mln tpa petchem complex to a planned refinery in the desert state of Rajasthan, while HPCL-Mittal Energy Ltd (HMEL) is building a 1.3 mln tpa petrochemical plant at its Bhatinda refinery in northern Punjab.

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