Indian state-controlled refiner Bharat Petroleum (BPCL) said it will gradually shift its focus to producing petrochemicals from refining, as the government promotes electric vehicles that will eventually reduce demand for transport fuels.
BPCL will commission a 55bn rupees ($760mn) project to produce propylene derivatives this month, producing specialty chemicals like acrylic acid, oxo-alcohol and acrylates used in paints, adhesives and solvents. The expanded 310,000 b/d Kochi refinery produces 500,000 t/yr of propylene, half of which will feed the propylene derivative plant, with the rest to feed a second proposed polyol project.
The company is investing Rs111bn in a second venture at the Kochi refinery to produce polyols, propylene glycol and ethylene glycol by 2024. Polyols and propylene glycol are imported because of limited domestic output, while BPCL will use propylene produced at the refinery to make propylene oxide that will in turn feed the polyol plant. Demand for petrochemicals in India is forecast to grow at 8-10pc/yr, in line with anticipated 7pc economic growth.
BPCL will use its refineries in Mumbai and Kochi with a combined capacity of 550,000 b/d for a 15pc crude conversion for petrochemicals by 2024 from around 1pc now, company officials said.
The company's plan follows private-sector rival Reliance Industries (RIL), which will eventually only produce chemicals and jet fuel at its 1.36mn b/d Jamnagar refinery complex in Gujarat state. The ultimate goal of the oil-to-chemicals switch for RIL is to achieve a greater than 70pc conversion of crude refined in Jamnagar to chemical building blocks of olefins and aromatics.
