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BPCL and LG Chem sign MOU for Kochi refinery expansion

BPCL to invest $2.6 billion in Kochi Integrated Refinery Petrochemical project

Bharat Petroleum Corporation Ltd (BPCL) is the second-largest public sector refinery in India.

The Kochi refinery is located at Ambalmugal near the city of Kochi in Kerala.

The Kochi refinery capacity is actually of 9.5 million t/y or 190,000 b/d.

The actual portfolio of this refinery includes Liquefied Petroleum Gas, Naphtha, Motor Spirit, Kerosene, Aviation Turbine Fuel, High Speed Diesel, Fuel Oils and Asphalt.

As  petrochemical feedstock the Kochi refinery delivers for the domestic markets benzene, Toluene, Propylene, Special Boiling Point Spirit, Poly Iso Butene and Sulphur.

But the market conditions have changed in refined products as well as for the petrochemical

The declining market for heavy fuel oils high in sulphur content and reduced availability coupled with increased prices of light/ low sulphur crudes, has made it imperative for refineries to upgrade the treatment of their residues.

 Thus the proposed Integrated Refinery Expansion project is to minimize residuals fuel generation and maximize distillates.

International standard Euro-IV quality auto fuels are already mandated in major cities in India.

Conforming fully to Euro-IV or higher norms is also being envisaged as part of the proposed capacity expansion project of the refinery.

BPCL is planning a capacity expansion from 190,000b/d (9.5 million t/y) to 300,000 b/d (15 million t/y), so an 110,000 b/d (5.5 million t/y) net capacity increase.

Next to the refinery, BPC operates a shore tank farm in Puthuvypeen.

Two additional storage tanks are being proposed as part of the Integrated Refinery Expansion Project.

For the upgrade and expansion of the Kochi refinery, BPCL is considering a capital expenditure of $2.6 billion (Rs 14,000 crore) as investment over the next five years for setting up a petrochemical plant and expansion of the Kochi refinery.

BPCL is targeting to complete the Kochi refinery in 2015.

BPCL and LG Chem signed a MoU on petrochemicals

Since the refinery expansion will generate more feedstock available for petrochemical productsBPCL is looking for a partner to diversify its actual portfolio with high added value petrochemical products.

According to the  Memorandum of Understanding (MOU) signed between BPCL and LG Chem from South Korea, the partners will form a joint venture to develop niche petrochemical specialties in a plant adjacent to the Kochi Refinery complex.

BPCL and LG Chem will build a fluid catalytic cracker (FCC) with a capacity of 500,000t/y Propylene

Then the petrochemical facility will manufacture 300,000 t/y of four chemicals, namely:

 – Polypropylene

 – Acrylic acid

 – Acrylate

 – Butanol

This petrochemical expansion is estimated in term of capital expenditure by BPCL around $1 billion (Rs 5,000-6,000 crore).

With other large refineries being revamped in India, BPCL is now keen to find the right partners such as LG Chem to accelerate the upgrading and expansion program of its Kochi Integrated Refinery Expansion Project in order to preserve its regional Market Leadership.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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