Reliance, whose two plants at Jamnagar in western India has installed capacity to process about 1.2 million barrels per day (bpd) oil, has the capability to turn the heaviest crude into value added products.
Billionaire Mukesh Ambani's Reliance seeks to add a fifth crude train of 400,000 bpd, some polymer units and changing the fuel for 450 megawatt of an already approved 2100 MW power plant from gas to coal, a note on the ministry's website said.
"Currently margins are low, demand also might not warrant such a huge expansion so the actual capacity addition may take some years," said an Asian trader.
The timings and the cost of expansion depend on getting the necessary government approvals, which may take months to years.
The new train will also help Reliance in further diversifying its crude portfolio and processing some of the "dirtiest, heaviest and high acid crude", said the trader.
"This could be their strategy to take all approvals in advance so at a future date they need not run after the bureaucracy for the approval," said an industry source.
The proposal mentions that annually 1.8 million tonnes of imported coal would be required for the 450 MW power plant.
In a separate proposal, HMEL seeks to raise capacity of its existing 180,000 bpd Bathinda refinery in northern India to 225,000 bpd.