BPCL may sell 'purest' water

A refiner embarking on an alternative fuel strategy may end up selling bottled water to quench the thirst of millions. That's what Bharat Petroleum Corporation (BPCL), India's second largest crude oil refiner, will do when it embarks on a 1,000 MW power generation, over the next three to five years.

The state-run refiner plans to use hydrogen fuel cell technology to generate power. While using fuel cell technology, chemical energy is converted into electrical energy with heat and water as by-products.

For every 1,000 MW of power generated, one million tonnes of water is produced. BPCL plans to market this pure and potable water to consumers. "We need to do something about this water, which will be in its purest form. Bottling is one of the options," said A M K Sinha, chairman and managing director, BPCL. The company plans to sell this water at its fuel retail outlets.

In July this year, the company sought shareholders' approval through a postal ballot to foray into new line of businesses, ranging from bottled water to provision of direct-to-home services. "We had called for a postal ballot to have an enabling provision so that as and when we plan to get into these ventures, we have our shareholders' approval," added Sinha.

The packaged drinking water market in India is worth Rs 1,500 crore and is growing at a compounded annual rate of 25 per cent. Of this, the natural mineral water segment forms just Rs 100 crore.

In the retail segment, Coca-Cola's Kinley and PepsiCo's Aquafina together dominate about quarter of the mass bottled water market. Ramesh Chauhan- owned Bisleri accounts for 16 per cent of the total sales. More than 50 per cent of the packaged drinking water market is dominated by 200-odd water brands that sell in regional pockets.

"We feel the bottled water market is growing and presents a lucrative opportunity for us. Our existing infrastructure in bottling and distribution gives us an edge to enter into this business," said a source from the company who did not wish to be identified.

BPCL has imported equipment from the US and installed a prototype at its Bangalore LPG bottling unit. The project involves production of hydrogen through electrolysis of alkaline water. "Fuel cell is slightly futuristic. It has not been exploited on a large commercial scale. Hydrogen fuel is a costly venture and thus not found in common use. If BPCL is successful in its venture, it will be a first in the country," said a Delhi-based analyst.

With fuel cell, chemicals constantly flow into the cell so it never goes dead. As long as there is a flow of chemicals into the cell, electricity flows out. Most fuel cells now use hydrogen and oxygen.

Fuel cells are attracting attention as a clean energy generation system. These generate and supply power and later recover thermal energy derived during power generation to produce hot water. In comparison with conventional power generation system, fuel cells offer better energy efficiency.

BPCL did not divulge the investment details, but a Delhi-based analyst said it could range between Rs 4,000 crore and Rs 8,000 crore for a 500-1,000 MW capacity.