By RAKESH SHARMA
NEW DELHI -- Bharat Petroleum said Friday it will spend
INR142.25 billion ($2.8 billion) by December 2015 to expand its
Kochi refinery in southern India by 63%, as it seeks to keep
its capacity in line with its refined fuel products sales
India's second-largest state-run refiner and fuel retailer
by capacity will increase the Kochi refinery's capacity by 120,000 bpd
to 310,000 bpd, it said in a statement to the Bombay Stock
Weakness in demand for refined petroleum products amid the
global economic slowdown has led several European and US
refiners to shut capacity.
However, state-run refiners in India and other emerging markets are
ramping up capacities as the expanding economies drive demand
The South Asian nation's state-run refiners and retailers
also have an advantage over their private-sector peers as the
government partly subsidizes them for selling diesel and
cooking fuels at controlled rates.
There is no such subsidy for private players, virtually
forcing them out of the local fuel retail market.
India's fuel products consumption is estimated to grow 4.3%
in the financial year ending Saturday to 147.06 million tons,
after growing 2.3% last year, government data showed, boosted
by demand for transportation fuels.
BPCL currently has a standalone refining capacity of 430,000 bpd, or
a tenth of India's total nameplate refining capacity.
The Mumbai-based refiner said it will also modernize its
Kochi refinery so that it can produce cleaner and
environment-friendly fuel products that can meet stringent
Post the expansion, the refinery will be able to process
cheaper high-sulfur crude oil, which will help it improve
margins and profit.
The company also aims to produce polymer-grade propylene
from the project, which will be used as feedstock for a series of niche petrochemicals.
BPCL said it expects to get environmental clearance for the
project in the latter part of the
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