Business Standard

Looking to build smaller refineries to avoid land acquisition hurdles: Puri

Large project plans such as the 60 MMTPA West Coast refinery have stagnated

Oil refineries, OMCs, oil marketing companies

Subhayan Chakraborty New Delh

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The Centre will focus on setting up relatively-smaller oil refineries, with capacities of around 20 MMTPA (million metric tonnes per annum), instead of the larger ones planned till now, petroleum and natural gas minister Hardeep Singh Puri has said.

He was speaking at the inaugural energy summit organised by the Indo-American Chamber of Commerce-North India Council (IACC-NIC).

Puri said that expanding the country’s refinery capacity to 450 MMTPA remains a key focus area and certain policy decisions would follow.

“If we make it too big, then land acquisition and other issues will come up,” he stressed.

The minister’s comments come in the backdrop of multiple projects such as the West Coast mega refinery facing roadblocks due to land hurdles, lack of environmental clearances or funds.
Set to come up in Maharashtra’s Ratnagiri district, the refinery was first announced in 2015. The $44-billion project had targeted an unprecedented refinery capacity of 60 MMTPA.

But back and forth on the issue between the previous Shiv Sena-controlled Maharashtra government and the BJP-led Centre had held up the mega project.
Announced in 2013, India’s largest upcoming integrated refinery and petrochemical complex, the Rajasthan Refinery Project (RRP) is also behind deadline.
Business Standard had recently reported that the government will soon be forming a core team to look into the hurdles, revive talks and bring multiple stakeholders to the discussion table, officials said. This will include officials from the ministry, oil marketing companies (OMCs), and others.
Currently, India’s refining capacity stands at approximately 250 MMTPA or about 5 million barrels per day (bpd). Meanwhile, fuel demand is expected to double to 10 million bpd by 2050.
The country already has the fourth-largest crude refining capacity in the world, but rapidly burgeoning domestic demand has made the government prioritise capacity addition.
Puri said the country needs refineries, which would also contribute to the production of petrochemicals and green hydrogen.
Speaking at the event, Sunil Jain, operating partner at Essar Capital, stressed on the need for energy transition by adding more and more renewable energy capacity like solar, wind and green hydrogen.

He stated that India would require $500-billion investment in the next eight years till 2030 to achieve its target of 500 GW of green energy.

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First Published: May 30 2023 | 8:55 PM IST

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