BPCL in talks with lenders to raise about Rs 32,000 crore for refinery expansion, petchem projects: Report

Bharat Petroleum Corp (BPCL) is in talks with lenders to raise about Rs 32,000 crore ($3.8 billion) in what could be the biggest local-currency loan in the country this year, Bloomberg reported. 

The state-run oil company has already received expressions of interest, with the nation’s largest lender, State Bank of India, set to lead the transaction, the report added. 

Punjab National Bank, Bank of Baroda and Bank of India are some of the other lenders on the 15-year loan, and more may join, the people said. It may be priced around 8.4 percent level, according to Bloomberg. 

BPCL plans to increase its integrated refining and petrochemical capacities within the next five to seven years to meet growing energy demand, Chairman G Krishnakumar told shareholders on August 30. 

India’s annual consumption of refined fuels and petrochemicals is expected to rise steadily by 4-5 percent and 7-8 percent in the ‘foreseeable future’, Krishnakumar said. 

Earlier this year, BPCL announced plans to raise its refining capacity to 900,000 barrels per day and build two new petrochemical projects at 310,000 bpd Kochi refinery in southern India and 1,56,000 bpd Bina refinery in Central India. 

The company is putting focus on Bina Refinery’s expansion with plans to increase its capacity to 15 MMTPA (Million Metric Tonnes Per Annum) by 2026. A significant capital outlay of Rs 49,000 crore is dedicated to expanding refining capacity and enhancing petrochemical integration. 

BPCL’s Kochi refinery expansion includes upgrading to produce higher-value products and integrating petrochemical facilities with Rs 15,000 crore allocated for capacity enhancement, including producing more niche petrochemicals. 

The company has set a target to end net carbon emission through its operation by 2040. To meet the net zero goal, it is investing Rs 1 lakh crore into generating renewable power, green hydrogen, compressed biogas, carbon capture utilisation and storage, to offset its carbon emissions.