The Mangalore Refinery & Petrochemical Ltd, a subsidiary of ONGC, has said that it is advancing its annual maintenance shutdown of its production units due to the non-availability of water. The refinery, based in Mangalore, has a capacity to refine 15 million tonnes per annum and was receiving around 5.5 million gallons of water per day from the Nethravati river.
“Water availability in the Nethravati river and its downstream dams started depleting from the end of March. As a result the district authorities enforced the reduction of water supply to MRPL to a third and finally on April 11, 2012, completely stopped the intake of water from the river,” MRPL said in a statement.
A company spokesperson told Business Standard, as on date, reserve water availability in the refinery can meet the full load for 1.5 days. “To overcome the situation and by pulling on the resources for the next couple of days till rainfall, it has been decided to shut down phase 2 and 3 units immediately,” he added.
The company is not expected to have a major material impact on its revenues as an annual maintenance shutdown had been planned from April 17, 2012. “We are having to advance the shutdown by five days. As a result, there will be a shortage of supply of products to MRPL-fed locations in South India. Further, we may have to incur additional demurrage on account of the delays in unloading crudes because of ullage (the amount of liquid lost during shipment) problem and loading of products,” he added.
Company officials added that other oil refiners, including HPCL and IOC are increasing their production to compensate for the drop in production at MRPL.