MRPL to invest Rs12,800 crore in refinery upgrade
15 Feb 2006
Petroleum refining company MRPL, a subsidiary of ONGC, will invest Rs12,800 crore for upgrading its refinery at Mangalore besides setting up an aromatics complex. The company''s board has approved the investment and has sent it for the consideration of parent company ONGC.
After the upgrade, the refinery would be able to process heavy and sour crude grades of crude leading to higher refining margins. Heavy and sour crude oil prices are lower than better grades like the NYMEX benchmark WTI or the Brent.
MRPL said the upgrade would also improve the distillate yield by 11 per cent to 83 per cent of crude input. This would reduce the quantity of low grade products, where realisations are lower than the cost of crude.
The upgrade would also help the company to produce high grade diesel and petrol, conforming to higher emission standards like Euro III and Euro IV. There is currently a shortage of high grade fuel in the country and demand is expected to go up in future as tougher emission standards are implemented. Such products also enjoy good export demand.
MRPL also said the propylene capacity would go up to 300,000 tonnes per annum after the completion of the upgrade.
The company would also set up a new aromatics complex within the proposed special economic zone (SEZ) being promoted jointly by MRPL. The complex would use naphtha feed from the refinery and would have the capacity to produce 900,000 tonnes of paraxylene, a feedstock for PTA.
MRPL would also set up a facility for producing lubricant oil base stock as a part of the refinery. The facility would produce high end group II and group III base stock.
The refinery upgrade programme is expected to be completed within three-and-a-half years which would make MRPL the second largest single location oil refinery in the country after the Jamnagar refinery of Reliance Industries.
MRPL was initially promoted by the Aditya Birla group along with PSU oil marketing companies. The company went through some initial difficulties as the capacity was low at 3 million tonnes per annum. Later, ONGC acquired a majority stake in the company by buying out the Aditya Birla group and turned it around by expanding capacity and achieving better efficiency.
MRPL is trading at Rs45.2 (up 4.27 per cent) at 11.00 AM on the NSE today.
