Kochi Refinery Ltd (KRL), which is embarking on big-ticket expansion plans in the southern state of Kerala, has received the crucial green clearance from the Union ministry of environment & forests last month. This will help the company to go ahead with the integrated refinery expansion project (IREP) and plan for downstream projects.
Kochi Refinery, a unit of Bharat Petroleum Ltd (BPCL), currently has a refining capacity of 9.5 million metric tonne per annum (mmtpa ) to produce Euro-III and IV compliant auto-fuels and various other petroleum products.
Commenting on the project, John Minu Mathew, executive director of KRL, said, The expansion project is an effort to meet the countrys growing energy needs and make auto-fuels more environment-friendly. This will also increase the self-sufficiency of BPCL and help introduce new products.
The IREP project proposed by BPCL would raise the refining capacity of Kochi Refinery by 6 mmtpa to 15.5 mmtpa, modernise the refinery to produce Euro-IV and Euro-V compliant auto-fuels, and upgrade low-value refinery residue stream to value added products. The project would cost R14,225 crore and would be completed by December 2015.
KRL is setting up a 10.5-mmta a year crude unit and plans to discontinue operations of the existing 4.5 million crude unit set up in 1966.So the net addition would be 6 mmtpa. The most important expansion includes a fluid catalytic cracking unit (FCCU), which would be able to produce a significant quantity of propylene. Currently, we produce about 50,000 tonne of propylene a year and after the expansion our capacity will go up to five lakh tonne a year. This will be a major addition to our product portfolio. Production of propylene, a major petrochemical feedstock, can trigger further investments, Mathew said.
KRL has identified a series of projects to fully utilise the propylene to make import-substitute products like acrylates and super-absorbent polymer. BPCL has signed a memorandum of understanding with petrochemical major LG Chem, South Korea, for a propylene-based petrochemical complex.
Estimated investment on this petrochemical JV is estimated to be in the range of R5,000-6,000 crore and the complex is expected to be on stream in tandem with the above expansion project, Mathew added. This investment totalling to about R20,000 crore is the single largest investment in Kerala, which can generate ample employment opportunities as well as all-round economic growth and development, he said.
Apart from the conventional petroleum products, this expansion would also produce about 1.3 mmtpa of petcoke as a by-product. This could also open the possibility of setting up a petcoke-based power plant in the state as the generation cost is comparable to coal and cheaper when compared with power generated from other thermal sources such as naphtha, company sources said.
Kerala-based PSUs like Kerala Metals & Minerals and Travancore Cements can use petcoke produced from this project. Additional sulfur production of about 1,000 tonne per day can be used for making fertilisers. FACT imports sulphur for its plants and KRL being very near would be able to supply it through pipeline as molten sulphur, sources said.
Kochi Refinery, formerly known as Cochin Refineries Limited, started in 1966 with a refining capacity of 50,000 barrels per day. The refinery was originally established as a joint venture in collaboration with Phillips Petroleum Corporation, USA. KRL has a crude oil receipt facility with a single point mooring (SPM) and an associated shore tank farm, since December 2007. The refinery is equipped to receive crude oil in very large crude carriers (VLCCs), which reduces freight charges.