HPCL’s Rajasthan refinery to start operations by Jan 2025

Public sector refiner and fuel retailer Hindustan Petroleum Corporation (HPCL) plans to start commercial production of fuels at the country’s newest refinery in Rajasthan’s Barmer by January 2025. The refinery-cum-petrochemicals complex, being built at a cost of nearly Rs 73,000 crore, will have a crude processing capacity of 9 million tonnes per annum (mtpa) and is expected to cater to the rapidly rising fuel demand in the northern parts of the country.

The refinery has achieved 76 per cent mechanical completion and the first refined products are likely to start flowing from the unit by December or January next year, HPCL’s Director, Refineries S Bharathan told reporters on the sidelines of the India Energy Week in Goa. It will be the first refinery to be commissioned in India since Indian Oil Corporation’s (IOC) 15-mtpa unit in Odisha’s Paradip.

It will also be the first refinery to come on stream since Prime Minister Narendra Modi last year announced that India aims to increase its total refining capacity to 450 mtpa from 254 mtpa. India is among the top economies that are driving global oil demand growth. According to the International Energy Agency’s projections, India will overtake China in 2027 to become the biggest driver of oil demand growth globally.

HPCL’s Rajasthan refinery is expected to operate at 75-80 per cent of its 9-mtpa capacity in the first year—2025—as units will get commissioned in a phased manner, Bharathan said, adding that full capacity utilisation is expected to be achieved by 2027. HPCL has two refineries of its own at Mumbai and Visakhapatnam, and a joint-venture unit in Punjab’s Bathinda.

The Rajasthan facility’s petrochemicals unit is likely to be commissioned around three months after the refinery comes on stream, Bharathan said. The refinery-cum-petrochemicals project is being executed by HPCL Rajasthan Refinery (HRRL), in which HPCL has a 74 per cent stake, while the rest is held by the Rajasthan government.

The project was first announced in 2008, but could not take off for years due to differences with the state government on fiscal incentives. Once the issues were resolved, work on the project site began in 2018.

The refinery will process crude oil produced in Rajasthan, apart from using imported crude. Bharathan said that the facility is a highly complex one and will be able to process nearly all types of crudes. The complex will produce Bharat Stage VI (BS-VI) grade petrol, diesel, apart from other fuels and various petrochemical products. Apart from robust fuel demand, demand for petrochemicals in India is slated to rise rapidly in the years to come. Despite its large size and population, the per-capita petrochemical consumption in India is significantly lower than developed economies.