Indian state-controlled refiner Mangalore Refinery and Petrochemicals (MRPL) is going ahead with plans to expand its petrochemical business, ONGC chairman Arun Kumar Singh said.
State-controlled upstream firm ONGC is MRPL's main shareholder with a 72pc stake, followed by state-controlled refiner Hindustan Petroleum (HPCL) with 17pc and public holdings at 11pc.
It is better for MRPL to diversify its portfolio given that the transport sector may move towards electric vehicles in future, MRPL's director of refinery Sanjay Verma said. Delhi plans for electric vehicles to account for 30pc of the country's automotive sales by 2030 in a move away from full diesel and full gasoline vehicles. "We have hydrocrackers. We need to have investment done in such a fashion [as] to have a flexibility of products."
MRPL will focus on establishing a petrochemical plant on India's west coast and the expansion programme is under configuration, the company's general manager M Venkatesh told Argus on 29 May on the sidelines of a conference, but did not give further details.
MRPL operates a 300,000 b/d refinery in Mangalore on the west coast.
It said in 2019 that it was scaling back plans to expand the refinery as it looked to minimise capital expenditure, but developing its petrochemical businesses was already on the cards back then. The refiner first announced plans to expand its refining capacity in 2015 against a backdrop of rising Indian fuel consumption.
"There is a good possibility or value addition in increasing our capacity in polypropylene. Land acquisition is in [an] advanced stage," Verma said, but did not go into more details as talks on the petrochemical expansion are still ongoing.
MRPL already produces polypropylene from its 440,000 t/yr unit at the Mangalore refinery, as well as up to 900,000 t/yr of paraxylene as part of its OMPL joint venture with ONGC.
Despite MRPL's plans to expand its petrochemical capacity, it has no refinery expansion plans for now, said Venkatesh.
Meeting gasoil needs
MRPL has also been gearing up to export gasoil to Europe, but is anticipating stronger domestic demand this year and wishes to cater to the domestic market first before exporting. MRPL is India's second-largest exporter of gasoil to Europe.
Exports of gasoil or diesel, the primary product shipped from India to Europe, were at 25.57mn bl (213,000 b/d) during the first four months of the year, data from oil analytics firm Vortexa show. This compares with 16.21mn bl in the first four months of 2022. The January-April shipments were mainly from India's western port of Sikka, which is managed by Indian private-sector refiner Reliance Industries.
MRPL achieved its highest-ever throughput of 17.14mn t (350,313 b/d) in the April 2022-March 2023 fiscal year, compared with 15.05mn t the previous year, the company said. The refiner has been importing Russian crude under the price cap of $60/bl and has been using dollars and dirhams for such trades, a person with knowledge of the matter said.
India has received 2mn b/d of Russian crude so far in May, Vortexa data show, with MRPL accounting for roughly 5pc.
MRPL also added 31 retail fuel outlets during 2022-23, taking the total number of outlets to 63 as of 31 March. Its gross refining margin was at $9.88/bl in 2022-23, up from $8.60/bI in the previous fiscal year.
