Visakh Refinery to expand capacity

Santosh Patnaik

VISAKHAPATNAM: After overcoming the setback it received in the aftermath of September 14, 1997, vapour cloud explosion, Visakh Refinery is now gearing up for expanding its capacity.

The refinery owned by Hindustan Petroleum Corporation Limited (HPCL) has set the ball rolling for expanding its capacity from 8.3 million tonne to 10 million tonne per annum with an investment of Rs. 3,000 crores.

``We are getting ready to implement advanced process controls (APC) for the entire refinery process units by 2006-07. The expected benefit from APC implementation is $0.09 per barrel,'' HPCL General Manager and in-charge of Visakh Refinery A.S. Rao said.

Another initiative aimed at profitability improvement is to augment distillates. Bottoms upgradation facilities are being considered as part of the expansion.

Lion's share

Incidentally, Visakh Refinery has a major share in the performance of HPCL during the current fiscal. According to indications, the refinery will surpass its highest-ever crude processing of 7.8 million tonnes achieved last year. Going by the trend, in the first half of 2005-06, the refinery is set to cross eight million tonne mark by March 2006.

Import of crude

Among new initiatives, efforts are being made to import crude from various countries to ensure better crude mix. Four very large crude carriers (VLCCs) have been acquired to bring down its crude freight cost by $0.7 per barrel on each VLCC parcel handled. So far three VLCCs were handled through Kakinada and one at Vizag Port.

Even as efforts are on to increase profit, cost cutting measures are also underway. The management endeavour is to optimise energy efficiency, product distribution and savings in financing and operating costs.

Due to extra pressure as fallout of dramatic rise in crude oil prices, construction of a single buoy mooring for receiving crude through VLCC at a suitable location is being explored.

Massive investment

A high-level delegation recently called on Chief Minister Y.S. Rajasekhara Reddy to discuss about its plans for setting up a refinery and petrochemical complex at the proposed Special Economic Zone at Achutapuram.

After green signal given by the State Government, HPCL sought allotment of at least 2,000 acres. The response is also positive, a HPCL official said. The project will involve an estimated investment of Rs. 5,000 crores. A private partner may also be involved in the project for which expression of interest will be sought after obtaining all the clearances.

To manufacture petrol and diesel complying with Bharat II and Euro III norms, the refinery has initiated Clean Fuel project at a cost of Rs. 2,000 crores. The project will be commissioned by December 2006.

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