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India's first biofuel refinery to be ready by 2019

Numaligarh Refinery to ink JV with Finland-based, Chempolis to implement Rs 950-crore project

Supratim Dey  |  Guwahati 

abc image via Shutterstock.
abc image via Shutterstock.

With Indian oil marketing (OMCs) witnessing a surge in the requirement of bio-fuel, as national policies mandate certain percentage of its blending with and diesel, India within next three years will get its first bio-fuel in Assam.

It will be implemented by Limited (NRL), in partnership with Oy, a Finland-based company, the Rs 950-crore project will use bamboo, which grows abundantly in the region, as its feedstock and produce fuel grade bio-ethanol.

Presently, the ‘National Policy on bio-fuel 2009’ mandates 10% blending of and diesel and targets to up this level to 20% in near future. The would be producing 49,000 tonnes of ethanol annually and this would primarily be used to blend and diesel of NRL and the surplus will be sold to other oil marketing to cater to the Eastern and Northeastern markets.

The requirement of bio-fuel is expected to shoot-up in Northeastern states post 2017 as the exemption of selling blended petrol and diesel would end by then. The project has been planned keeping in view the future demand of bio-fuel in the region.

“By the next week all the approvals and formalities from the government are expected to be over. The work is going to start by this financial year and we expect to complete the project within two and half years to three years. As this project is now made part of the ‘Hydrocarbon Vision 2030 for Northeast’, we expect things would move fast,” said a NRL spokesperson.

The company in 2014 had signed a partnership agreement with the Finnish company for jointly implementing the “world-class” project. Oy has developed a patented technology – formicobio, for processing non-food raw materials into cellulosic ethanol, cellulosic sugars, bio-chemicals and bio-coal.

Sources from NRL informed that the company would convene a board meeting next week to take its final approval on forming a joint venture with the Finnish company. “As soon as we get the board approval, we will proceed and form the 50-50 joint venture,” the spokesperson said. The funding will have a 70:30 debt-equity ratio. The project would come up within the existing campus of NRL.

Production of fuel grade bio-ethanol is expected to reduce NRL’s requirement of imported Methyl Tertiary-Butyl Ether (MTBE) and Py-Gas for petrol blending due to higher octane number of ethanol and would result in net savings for the company.

NRL and jointly undertook an assessment study for ascertaining the availability of the required feedstock in Northeastern India. The Finnish company also carried out experimental testing of various specimens of bamboo and other potential biomass feedstock materials available in the region and provided the entire pre-project technical consultancy required for completion of the Detailed Feasibility Study for the project.

The project is expected to give a fillip to bamboo cultivation in the region and help bring an economic transformation for many in rural areas. Last December, NRL had inked a Memorandum of Understanding (MoU) with Nagaland Bamboo Development Agency (NBDA) for sourcing of 2 lakh tonnes of semi-processed bamboo from Nagaland annually.

“This refinery project will link local farmers of the region to the hydrocarbon economy of the nation. It has the potential to bring around an economic revolution in the rural areas of Northeast similar to what tea has been doing in Assam,” said Dharmendra Pradhan, Union petroleum and natural gas minister, here on Tuesday.

Refinery, which is situated in Golaghat district of Assam, is a joint venture between Bharat Petroleum Corporation Limited (BPCL), Assam government and Oil India Limited (OIL), with BPCL being the majority shareholder.

First Published: Thu, February 11 2016. 13:23 IST