India's first greenfield integrated refinery complex in a decade starts operations

India's first greenfield integrated refinery complex in a decade began operations July 4, a development that will advance the country's energy security and support its emergence as a key refining hub, Prime Minister Narendra Modi and Petroleum Minister Hardeep Singh Puri said.

Dubbed the "jewel of the desert," HPCL Rajasthan Refinery Ltd. -- an integrated refinery and petrochemical complex with a capacity of 9 million metric tons/year and 2.4 million mt of petrochemicals capacity -- was inaugurated by Modi over the weekend, according to a statement from the prime minister's office.

"Today, we are inaugurating the Rajasthan Refinery. India has become the fourth-largest refining nation in the world. And we will not stop here -- in the coming years, this capacity will increase further. These efforts enabled India to fight and overcome the greatest energy crisis of the century," Modi said during the inauguration July 4.

The complex, jointly built by state-run Hindustan Petroleum Corp. and the Rajasthan government, with equity stakes of 74% and 26%, respectively, commenced operations at a time when the conflict in the Middle East prompted Indian refiners to diversify their crude sourcing.

India's cabinet recently approved an 84% increase in the project cost for HRRL to Rupees 794.59 billion ($8.35 billion), from Rupees 431.29 billion. Puri said the HRRL refinery is highly complex and will feature a product slate of more than 26% petrochemicals.

"At a time when very few new refineries are being built around the world, and the refining capacity of even developed countries is declining, India is emerging as a global refining hub," Puri said in a LinkedInpost July 4, adding that the refinery will have a Nelson Complexity Index of 17.

Refining expansion

The Paradip Refinery, operated by the state-run Indian Oil Corp., was the last standalone refinery commissioned in India in 2016, with an installed annual capacity of 15 million mt. Since then, many refiners have undertaken expansion projects; however, HRRL will be the first standalone refinery to be developed since Paradip.

"After the Paradip Refinery was inaugurated in 2016, HRRL stands out as a rare new-build, world-scale addition to global refining capacity, reinforcing India's position as a bright spot in global refining investment," Puri said. "It is one of the biggest projects in the oil sector in India and will further accelerate our journey toward energy self-sufficiency."

According to S&P Global Energy CERA, the refinery is designed to operate with over 83% imported medium-grade crude, with the remainder sourced domestically. The refinery's configuration includes large vacuum distillation, delayed coker and petro-fluid catalytic cracking units, enabling it to process a variety of heavier crude grades as well.

Incorporated in September 2013, HRRL is expected to mainly produce Euro 6-grade high-speed diesel, gasoline and value-added petrochemical products such as polypropylene, butadiene, linear low-density polyethylene, high-density polyethylene, benzene and toluene.

CERA analysts have said the project's high level of complexity is expected to enable it to achieve higher gross refining margins compared with HPCL's existing refineries in Mumbai and Visakhapatnam.

India aims to increase its refining capacity to 309.5 million mt/y (or 6.2 million barrels/day) by 2030, from 258 million mt/y, according to Puri.