Bharat Petroleum's refinery in Kochi set for expansion

State refiner Bharat Petroleum Corporation (BPCL) is expanding its Kochi refinery where it is also setting up a petrochemicals unit, Chairman and Managing Director S. Varadarajan has said.

The expansion project envisages increasing the capacity of the Kochi refinery from six million tonnes per annum (MTPA) to 15.5 MTPA, he said. After the expansion, the refinery will also be able to produce automotive fuels complying with Euro-IV and Euro-V specifications.

"We are also looking at plans for undertaking low-cost expansion of Bina (in Madhya Pradesh) to meet the growing demand," he added.

Varadarajan said as part of the expansion of Kochi refinery, BPCL would be setting up a petrochemical fluid catalytic cracker that would generate 500,000 tonnes of propylene annually. The propylene produced can be the feedstock for the petrochemical venture.

BPCL is examining several options in this regard, including implementing the petrochemicals initiative as a joint venture or by direct sourcing of technology from licensors. The PSU has been talking to major players in the petrochemicals business for jointly setting up a complex in the vicinity of the refinery, he said.

Giving an update on BPCL's upstream ventures, Varadarajan said the company's overseas arm, Bharat PetroResources (BPRL), has stakes in exploration blocks in Brazil, Mozambique, Australia, Indonesia and East Timor in consortium with global companies.

"The Mozambique block is in the second phase of exploration. Till date, there have been eight successful discoveries of natural gas and 15 appraisal successes," he said. The block has estimated recoverable resources in the range of 35 to 65 trillion cubic feet of natural gas.

The consortium plans to put up two trains of a liquefied natural gas plant, of five million metric tonnes a year each initially, with the provision for future expansion. The partnership is progressing on various fronts like marketing and financing with a view to dispatch the first cargo by 2018.

As far as Brazilian blocks are concerned, appraisal plans for Farfan, Cumbe and Papangu discoveries have been submitted to the Brazilian upstream regulator.

In Indonesia, Badik-1, an exploratory well, was drilled in the first phase of exploration.

The second appraisal well, Badik 3, was spud in January and is now under drilling.

In Australia, BPRL has a participating interest of 27.803 per cent in Block EP-413. This block is being explored for shale gas while drilling of an exploratory well has already been completed.

BPCL posted net sales of Rs 185,197 crore during the nine months ended December 2013, up from about 6.6 per cent from 2012. For the nine months, BPCL reported a loss of Rs 7.49 crore after absorbing Rs 4,163 crore in under-recoveries.

The net loss during the corresponding period of the previous year was Rs 2,154.39 crore. Its refining margin was steady at $ 3.50 a barrel during Apr-Dec 2013.