India says energy investment plans on track: Correction

Corrects downstream investment focus in paragraph 5. Removes erroneous reference to product demand

India is the sole remaining centre for major energy investment, according to its oil minister Dharmendra Pradhan, who said today that he has no plans to change his strategy on growing investment, infrastructure and demand, despite setbacks caused by the Covid-19 pandemic.

"India is the only vibrant market for any investment. There is a little slowdown on demand, but in the upstream, midstream and downstream, we are confident we will not deviate from our investment plans," Pradhan said at the Energy Intelligence Forum today.

India has commitments of more than $60bn to transform it to a "gas-based economy," he said, through expansion of import terminals, pipelines, and distribution networks, while the government continues to tie up with major LNG suppliers.

"India is the number three energy consumer in the world, but our per capita is one third of the global average. We have an aggressive growth plan to change that," Pradhan said.

The downstream sector is another major focus for investment. India's refining capacity is around 5mn b/d, and state-owned IOC and Hindustan Petroleum (HPCL) plan to add 554,000 b/d in the next five years, taking their total to 2.25mn b/d.

Pradhan said that the ministry is not rethinking plans for a 1.2mn b/d refinery in the western Maharashtra state, which would represent India's biggest foreign investment. This project, to be combined with an integrated 18mn t/yr petrochemical complex, will be developed in a 50:25:25 joint venture between IOC, state-controlled Saudi Aramco and Abu Dhabi's state-owned Adnoc at a cost of more than $55bn. It has already been delayed by three years and has been moved from Ratnagiri to an as-yet undecided site. Pradhan said "we are a little bit lagging" on the project, although this is not because of its size or economics.

"These are local issues and we are talking to the local authorities in Maharashtra. We are not rethinking the size of the refinery, or the partners," he said.

New Delhi's plans to privatize state-owned refiner Bharat Petroleum (BPCL) are on track, Pradhan said, although it has delayed many times the tender deadline for the sale of its 53pc stake.

"The government is treading cautiously on how to offload its equity in Bharat, but our philosophy under the leadership of [prime minister Narendra] Modi has always been the government has no business in business," he said.

BPCL operates an old 240,000 b/d refinery in Mumbai, a 310,000 b/d refinery in Kochi on the west coast and the 156,000 b/d Bina refinery. It has just over 16,000 retail fuel outlets — almost a quarter of India's network — and 61 jet fuel outlets.

By Adal Mirza