Bharat Petroleum Corporation Limited (BPCL), India’s second-largest state-owned oil refiner, has announced plans to invest approximately $11 billion in constructing a new refinery and petrochemical complex in the southern state of Andhra Pradesh. This strategic initiative aims to meet the escalating fuel and petrochemical demand in India, the world’s fastest-growing major economy.
Project Details
The proposed facility will feature a refinery with a minimum capacity of 9 million metric tons per year and an ethylene cracker unit, enhancing BPCL’s petrochemical production capabilities. The project is estimated to cost between 900 billion to 950 billion rupees (approximately $10.56 billion to $11.14 billion). BPCL has commenced pre-project activities, including land acquisition, to facilitate the construction process.
Market Strategy
Approximately 80% of the output from the Andhra Pradesh complex is intended for distribution within southern India, a region characterized by a concentration of petrochemical industries and automobile manufacturers. This strategic location is expected to optimize supply chains and meet regional demand effectively.
Expansion Plans
In addition to the Andhra Pradesh project, BPCL is exploring the possibility of establishing a refinery in collaboration with Oil and Natural Gas Corporation (ONGC) in the northern state of Uttar Pradesh. These initiatives are part of BPCL’s broader strategy to expand its refining and petrochemical capacities over the next five to seven years, aligning with India’s projected annual consumption growth of 4-5% for refined fuels and 7-8% for petrochemicals.
Renewable Energy Initiatives
BPCL is also committed to advancing its renewable energy portfolio, targeting the development of 10 gigawatts (GW) of renewable energy projects by 2035. The company has announced a joint venture with Sembcorp to expand its existing renewable energy capacity of 300 megawatts (MW). This initiative aligns with BPCL’s goal to achieve net-zero carbon emissions by 2040, with planned investments in renewable power, green hydrogen, compressed biogas, and carbon capture utilization and storage.
Global Ventures
On the international front, BPCL holds a stake in the Mozambique LNG project, led by France’s TotalEnergies. Operations are expected to commence in early 2025, contributing to BPCL’s diversified energy portfolio and reinforcing its presence in the global energy market.
