IOC raises Chennai refinery expansion cost to $4bn

  • Spanish Market: Crude oil
  • 01/04/24

Indian state-controlled refiner IOC has increased the cost of building a refinery in Chennai in southern Tamil Nadu state by 12pc to 330bn rupees ($3.96bn) and raised its stake in the joint venture to 75pc.

IOC and its subsidiary Chennai Petroleum (CPCL) earlier held a 25pc stake each in their joint venture Cauvery Basin Refinery and Petrochemicals (CBRPL), which was formed to build a 180,000 b/d refinery in Chennai by 2025. Financial investors were to make up the remaining 50pc equity.

The revised capital structure of CBPRL has 75pc equity from IOC and 25pc from CPCL, IOC said.

The company did not specify any reason for the increase in cost nor clarify if there was any change in the timeline for completion of the project.

IOC had in 2021 approved the starting of a new unit in Tamil Nadu to meet demand for oil products in southern India, adjacent to CPCL's existing 211,000 b/d Manali refinery.

The original 20,000 b/d Nagapattinam refinery in the Cauvery Basin was shut down for dismantling in 2019. It is currently undergoing extensive refurbishment and expansion works.

IOC had in December 2023 announced a one-year delay to the expansion of its Panipat refinery to December 2025, and an increase in the cost by 10pc to Rs362.25bn.

IOC's nine refineries processed 1.46mn b/d of crude during April 2023-February 2024, up by 1pc on the year, according to data from the oil ministry. CPCL's Manali refinery processed 232,000 b/d of crude during the same period, up by nearly 3pc on the year.


Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

22/05/24

Mexico crude exports up after Tula refinery outage

Mexico crude exports up after Tula refinery outage

Mexico City, 22 May (Argus) — Mexican crude exports have bounced back in May after a power outage hit state-owned Pemex's 315,000 b/d Tula refinery last week, likely freeing more crude for the export market. Crude exports rose to about 838,000 b/d so far in May, up by 18pc from full-month April but still 22pc lower compared with all of May 2023, according to trade analytics firm Kpler data. The month-over-month hike was likely supported by a power outage at the Tula refinery on 13 May, which affected up to 20 processing plants, according to market sources. It remains unclear if the refinery has resumed operations, but sources said the restart could take about two weeks. The Tula refinery, which supplies refined products to Mexico City's metropolitan area, processed 246,500 b/d of crude in March, of which 182,000 b/d, or 74pc, was medium or light sour crude, according to the latest Pemex data. Medium and light sour crude exports rose by 13pc to 336,000 b/d so far in May from the previous month, Kpler data show. Additionally, fires at the Salina Cruz and Minatitlan refineries in late April could have also added to the uptick of crude exports. Mexico this year trimmed crude exports to feed its domestic refineries as President Andres Manuel Lopez Obrador seeks to cut fuel imports in his final year in office, in line with his campaign promise to make Mexico more energy independent. Pemex's six domestic refineries processed over 1mn b/d in March for the first time in almost eight years, driven by billion-dollar investments in maintenance since 2019 and the cut in crude exports. The start-up of the new 340,000 b/d Olmeca refinery could further reduce crude exports, but the refinery still faces multiple delays . By Antonio Gozain Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

UK general election set for 4 July


22/05/24
22/05/24

UK general election set for 4 July

London, 22 May (Argus) — A general election will take place in the UK on 4 July, prime minister Rishi Sunak said today. The announcement coincides with official data showing that UK inflation has fallen to its lowest level in nearly three years. Labour, the country's main opposition party led by Keir Starmer, has held a substantial lead in polls in recent months and performed well in local elections earlier this month. It won nearly 200 seats on local councils, as well as several regional mayoral contests, while the ruling Conservative Party lost almost 500 council seats. The Conservatives have been in power since 2010 and have fielded five prime ministers during that time. The two main parties are likely to release more detailed manifestos once the election campaign begins, but their current respective energy policies have many similarities. Both back a windfall tax on oil and gas producers and support nuclear power. They both also support offshore wind and solar power, although Labour has incrementally more ambitious targets for those renewables and has plans for more onshore wind. Labour also wants a zero-carbon power grid by 2030 , while the Conservatives are aiming for that in 2035. The Conservatives have rolled back some climate policy since Sunak became prime minister, while Labour in February backed down on its pledge to spend £28bn/yr ($35.6bn/yr) on the country's energy transition, if it wins the election. For a general election to take place in the UK, the prime minister must request permission from the British monarch — King Charles III — who then dissolves parliament. A general election must take place at least once every five years in the UK, although a prime minister can call one at any point. The UK's last general election was held on 12 December 2019 and Boris Johnson was elected prime minister. There have since then been two prime ministers — Liz Truss in September-October 2022 — and Sunak. Truss was selected by Conservative Party members and Sunak became prime minister in October 2022 after the only other candidate withdrew from the leadership contest. The Conservatives hold 344 seats out of 650 in the House of Commons, the UK's lower house of parliament. But 105 members of parliament have said that they will not run at the next election, 66 of whom are Conservatives. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US crude stocks rise by 1.8mn bl last week: Update


22/05/24
22/05/24

US crude stocks rise by 1.8mn bl last week: Update

Adds report details starting in seventh paragraph. Calgary, 22 May (Argus) — US crude inventories rose by 1.8mn bl last week on a sizable build in the Gulf coast region, the Energy Information Administration (EIA) reported today. Crude stocks across the US came in at 458.8mn bl in the week ended 17 May, up from 457mn bl a week earlier. Inventories were up by by 3.7mn bl compared to a year earlier. Stocks in the US Gulf coast rose on the week by 3.6mn bl to 261.5mn bl, approaching a 12-month high set in the week ended 26 April when stocks were at 261.6mn bl. The week-over-week build in the US Gulf coast ranks as the fifth largest through the first 20 weeks of the year. Inventories at the Cushing storage hub in Oklahoma rose by 1.3mn bl to 36.3mn bl, but that was still 910,000 bl lower than the same week in 2023. Crude inventories at the US Strategic Petroleum Reserve (SPR) increased by 993,000 bl to 368.8mn bl, the largest weekly build so far this year. SPR stocks are not included in the overall EIA commercial crude inventory figures. US crude exports rose last week by 595,000 b/d to 4.7mn b/d, while imports fell by 81,000 b/d to 6.7mn b/d. Net imports fell by 676,000 b/d to 1.9mn b/d as a result. Domestic crude output was steady at 13.1mn b/d. US crude refiners processed about 16.9mn b/d last week, up by 241,000 b/d from the week prior and the highest since the week ended 12 January. Runs were 354,000 b/d higher than the same week in 2023. Refinery utilization rates on average rose to 91.7pc nationwide, up from 90.4pc in the prior week and 91.7pc in the same week of 2023. Refiners in the midcontinent and Gulf coast regions drove the weekly gains, each climbing to multi-month highs. Utilization rates in the midcontinent rose to 94.8pc from 90.8pc in the week prior while rates in the Gulf coast climbed to 93.7pc from 92.7pc. By Brett Holmes US weekly crude stocks/movements Stocks mn bl 17-May 10-May ±% Year ago ±% Crude oil (excluding SPR) 458.8 457.0 0.4% 455.2 0.8% - Cushing crude 36.3 35.0 3.8% 37.2 -2.4% Imports/exports '000 b/d Crude imports 6,663 6,744 -1.2% 5,850 13.9% Crude exports 4,730 4,135 14.4% 4,549 4.0% Refinery usage Refinery inputs '000 b/d 16,894 16,653 1.4% 16,540 2.1% Refinery utilisation % 91.7 90.4 1.4% 91.7 0.0% Production mn b/d 13.1 13.1 0.0% 12.3 6.5% — US Energy Information Administration Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US WTI crude flows to India climb in April


22/05/24
22/05/24

US WTI crude flows to India climb in April

Singapore, 22 May (Argus) — Improved arbitrage economics and firmer demand for petrochemical feedstocks helped boost exports of naphtha-rich US WTI crude to India in April to its highest level in nearly a year, according to vessel tracking data. Around 208,000 b/d of light sweet WTI departed the US Gulf Coast for India in April, preliminary data from global trade analytics platform Kpler and Vortexa show. The shipments are to discharge at various Indian ports mostly in June, although the vessels' final destinations are still subject to change. The April volumes were higher compared with India-bound exports in March at an average of about 159,000 b/d and the highest monthly shipments of WTI from the US to India since May 2023, according to Kpler and Vortexa. Indian refiners had stepped up their purchases of WTI in recent months as prices for the grade on a delivered basis were deemed competitive compared with comparable alternatives such as Abu Dhabi light sour Murban crude, sources close to international trading firms and Indian refiners told Argus. Weak European demand as a result of refinery turnarounds had weighed on April-loading WTI prices, prompting other Asian refiners like China's state-controlled Sinopec to also buy June-delivery cargoes. The increase in WTI flows to India follow Indian refiners shunning light sweet ESPO Blend and Sokol crude from far east Russia earlier this year because of tightening US sanctions, prompting refiners to consider other alternative grades of similar quality. While Indian refiners have resumed purchases of ESPO Blend and Sokol crude loading in May and June following weaker demand from the grade's usual buyers in China, WTI exports to India remain steady. State-controlled Bharat Petroleum (BPCL) has signed a deal with BP to buy 1mn bl/month of WTI for four months starting in June, while preliminary data from Kpler and Vortexa show that more than 210,000 b/d of WTI has already departed for India in the first half of this month. Petrochemical push WTI is appealing for Indian refiners as the grade has a higher yield of naphtha, a key petrochemical feedstock, than other options such as Murban and west African crude, with Indian refiners looking to increase their petrochemical output. Naphtha comprises roughly 35pc of WTI's product yield, while Murban has a higher yield of gasoil and jet-kerosine than WTI. Despite Murban prices also coming under pressure as a result of Abu Dhabi's state-owned Adnoc diverting more of its heavier Upper Zakum crude to the domestic Ruwais refinery and freeing up more Murban for exports , Indian refiners prefer to import WTI for its high naphtha yields, market participants said. Firmer domestic demand has cut India's naphtha exports, with Indian refiners keeping larger volumes for use as a petrochemical feedstock. India's naphtha exports in 2023 were around 126,000 b/d (5.15mn t), down by about 17pc from average exports of 151,000 b/d in 2022, according to oil ministry data. Indian state-controlled refiners have instead focused on expanding their refining capacity , with a view to increase their diversification into petrochemicals to meet export demand. Most state-controlled refiners plan new petrochemical capacity.BPCL's expansion of its 156,000 b/d Bina refinery to 220,000 b/d will feature a new chemicals complex and produce more petrochemical products like ethylene and propylene. Hindustan Petroleum is aiming to commission an integrated petrochemical complex at its new 180,000 b/d Barmer refinery in 2025. By Sathya Narayanan and Roshni Devi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Asia demand lifts US VLCC rates to 4-month high


21/05/24
21/05/24

Asia demand lifts US VLCC rates to 4-month high

Houston, 21 May (Argus) — Rates for 2mn bl very large crude carriers (VLCCs) on the US Gulf coast reached four-month highs on 17 May amid elevated Asia-Pacific demand for US crude, especially in China. The rate to ship 270,000t of crude from the US Gulf coast to China, including $250,000 Corpus Christi, Texas, load-port fees, climbed by 11.6pc from 7-17 May to $10.1mn lumpsum, or $4.85/bl for WTI, the highest level since 12 January, according to Argus data. A surge of demand in the first half of May reduced tonnage in the Atlantic basin as Chinese refiners eye the end of a heavy refinery maintenance season . Over that span, the time-charter equivalent (TCE) rate, which reflects daily earnings for shipowners, for a scrubber-fitted VLCC hauling crude from Corpus Christi to Ningbo, China, increased by about $9,150/d to $50,613/d, according to Argus data. Similarly, the US Gulf coast-Rotterdam VLCC rate on 17 May matched its highest level since 11 January, reaching $4.95mn lumpsum, or $2.38/bl for WTI, including load-port fees, after Asia-Pacific demand limited the amount of VLCCs available for shipments to Europe. The rally comes amid rising onshore inventories of crude in China. Stocks increased to 924mn bl in the week ended 19 May, the most in nearly five months, according to data from analytics firm Vortexa. "An expected increase in refinery utilization during the third quarter justifies inventory building during (the second quarter), while the current import trend and ongoing refinery maintenance may imply less sharp inventory builds during May-June compared to last year," shipbroker BRS said. Last year, Chinese inventories of crude shot up to 1.02bn bl at the end of July from about 925mn bl at the end of April, Vortexa data show. A slower pace of inventory builds may create a less volatile environment for VLCCs compared to last year, BRS said. By Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more