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.
