26/01/30
Q&A: HPCL's Vizag upgrade to boost gasoil, crude slate
Q&A: HPCL's Vizag upgrade to boost gasoil, crude slate
Goa, 30 January (Argus) — India's state-controlled HPCL commissioned a residue
upgradation unit at its 301,000 b/d Vizag refinery this month, a move expected
to boost gasoil output and widen the plant's crude slate, including potentially
processing Venezuelan crude. The company is stabilising operations and plans to
begin commissioning its new 180,000 b/d Barmer refinery in the coming weeks,
with the refining section expected to be fully operational in the first quarter
of the current financial year, company chairman Vikas Kaushal told Argus on the
sidelines of India Energy Week in Goa. HPCL has undertaken a series of upgrades,
including the residue upgradation facility (RUF) at Vizag. What progress has
been made, and what comes next? The RUF at Vizag was commissioned earlier this
month. The facility uses advanced LC Max technology to deeply convert
bottom-of-the-barrel residues, with around 93pc of the feedstock upgraded into
distillates. At the heart of the unit are three large heavy duty reactors, all
manufactured in India. Each weighs over 2,200t, with wall thicknesses of about
25cm, which gives you a sense of the robustness required for this process. We
have commissioned the project and are now gradually bringing all units on stream
and stabilising operations. We expect stable performance over the next 6-8
weeks, which means by the end of March, the asset should be operating at steady
state. This upgrade dramatically enhances the crude flexibility of the Vizag
refinery. The second major project is the much-awaited Barmer refinery, one of
India's most complex greenfield refinery projects. Pre-commissioning activities
are already underway and we expect to begin commissioning in the coming weeks.
Once fully completed, Barmer will be an integrated refining and petrochemical
complex, designed with advanced heat integration and state-of-the-art
efficiency. It will also give us the flexibility to process heavier crude
grades, similar to Vizag. The third project, currently at an early stage, is the
expansion of base oil capacity at our Mumbai refinery under the Lube Oil Base
Stocks (LOBS) project How will the upgrade affect product yields and crude
choice at Vizag and Barmer? The primary increase will be in gasoil production —
that is the most significant product from this conversion process. Barmer is
still in the early stages of commissioning. Currently, it is processing a mix
that includes some local crude, such as Mangala crude, along with lighter Middle
Eastern grades. Over time, as all units are commissioned, we will move towards a
broader and heavier crude slate. The refining section is expected to be fully
commissioned in the first quarter of the current financial year, while more
complex petrochemical units are expected to reach mechanical completion in 5-6
months. Full refinery and CDU operations are targeted for the first quarter of
the next financial year. At Vizag, we have already begun processing heavier
crudes compared to the past. At present, during the testing and stabilisation
phase, we are running lighter crudes for a few weeks. Once the RUF stabilises,
much heavier crude will be processed in line with the facility's capacity. There
have been reports that HPCL is looking to buy Venezuelan crude. Is this under
consideration? We have not processed Venezuelan crude in the past, but the
additional capacity now gives us that flexibility. At present, our current focus
is on stabilising the newly commissioned unit. Given the operational complexity
of bringing a large facility on stream, we are sticking to regular,
tried-and-tested crudes, grades for now. Once the unit is fully stabilised, we
will evaluate heavier grades, including Venezuelan crude, if and when it becomes
available. At this stage, we are not actively scouting for such cargoes. Vizag
has traditionally processed a significant proportion of Basrah and similar
medium-sour crudes, and that continues to be a staple. Following the upgrades,
can we expect an increase in exports or will a larger share be directed for
domestic use? That will largely depend on how the market evolves. Our primary
objective has always been to serve the domestic market, with exports used mainly
to manage surplus volumes. There is significant refining capacity coming up in
India — not just at HPCL, but also at Panipat, Numaligarh and elsewhere. As
these capacities come on line, all refiners will reassess their domestic and
export strategies. Traditionally, HPCL has been domestically focused, but going
forward, we will need to look at exports more proactively and progressively.
What are HPCL's plans and timeline for producing sustainable aviation fuel (SAF)
at Vizag? In December, we successfully completed a pilot using the co-processing
route with used cooking oil (UCO) within our existing facilities, requiring only
minor modifications. The pilot met the targeted blend specifications. We plan to
scale up production and anticipate a steady supply of SAF by the second and
third quarters of the next financial year, keeping us on track to meet the
initial 1pc blending mandate. By Rithika Krishna and Rituparna Ghosh Send
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