MRPL phase III expansion cost up 50 per cent; project to be delayed by 15 months

12 December 2008

The phase III expansion of Mangalore Refinery and Petrochemicals Ltd (MRPL) will now cost Rs12,412 crore (up Rs4,469 crore or 50 per cent) and will be delayed by 15 months.

The mega project, originally estimated to cost Rs7,943 crore, is now expected to go on stream by October 2011. 

MRPL, a subsidiary of ONGC and a mini ratna category I company, is augmenting its refining capacity from 9.6 mmtpa to 15 mmtpa. Preparatory work has been on for sometime now and the mandatory approvals have since been secured.

MRPL managing director U K Basu said while Phase III expansion was to have achieved mechanical completion by June 2010, an overheated market, with steep increases in steel and cement prices in the last 12 to 18 months, hampered the appointment of process licensors and delayed land acquisition.

He put the new completion date at October 2011 and revised the project cost to Rs12,412 crore as approved by the boards of both MRPL and ONGC.

Despite 50 per cent cost overrun, and a 15 month time overrun, MRPL said it has benefited from the delay.  MRPL said it re-engineered the process design to make the new unit capable of handling high tan and acidic crudes more than envisaged before. It also added some more secondary processing units to upgrade residues and the entire diesel quality.