Striking the Goal of 21 MMTPA Capacity by 2021

P P Upadhya
Managing Director, Mangalore Refinery and Petrochemicals Limited (MRPL)
MRPL, a subsidiary of ONGC, is a state-of-the-art grassroots refinery located in Mangalore. The refinery has got a versatile design with high flexibility to process crudes of various API and with high degree of automation. P P Upadhya, Managing Director, Mangalore Refinery and Petrochemicals Limited (MRPL), talks to Offshore World about the refinery's expansion plans, its profit margins and many more. Excerpts:

Please apprise us the capacity MRPL is utilising at the moment and the sources of crude?
MRPL's name plate capacity today is 15 MMTPA. MRPL will be utilising near to 100 percent of its capacity in the financial year 2013-14. MRPL capacity will be ramped up after stabilisation of secondary processing units of the new expansion project. MRPL sources its crude mainly from Middle East viz Iran, Saudi Arabia, Kuwait, UAE, West African countries and is looking forward to source crudes from Latin American countries in future, once secondary units are fully stabilised.

MRPL Phase III Expansion, which is nearing completion except poly propylene unit. Can you share the detailed approach in order to enhance the capacity expansion and commissioning activity of MRPL?
MRPL has taken up huge expansion plans at the cost of around Rs15,000 Cr which include:
  • Phase-III Expansion and Upgradation Project (Cost: Rs 12,160 Cr): With the commissioning of Phase-III crude unit MRPL's refining capacity has enhanced to 15 MMTPA on 25th March 2012. Diesel Hydrotreater and Hydrogen units are in operation. Balance units viz Sulphur Recovery Unit, Petro FCC, Delayed Coker, Coker Hydrotreating Units will be commissioned within next two months. Commissioning has got delayed due to the non availability of steam and power from captive power plant being built by BHEL.
  • Poly Propylene Project (Cost: Rs 1800 Cr) has achieved physical progress of 92.7 per cent as on 15th December 2013. The unit is expected to be mechanically completed by March 2014 and will be fully on stream by July 2014.
  • Single Point Mooring: The refinery has set-up a Single Point Mooring (SPM) facility off the Mangalore coast at a cost of about Rs 1044 Cr SPM enables MRPL to ship crude using Very Large Crude Carrier (VLCC), to source opportunity crudes from West African and Latin American countries. SPM was commissioned successfully on 29th August 2013 and is fully operational. However, due to non availability of crude cavern for storage of crudes, only Suez Max vessels are loaded at present.
MRPL has drawn plans to augment its refining capacity to 18 MMTPA by 2018-19 and 21 MMTPA by 2021. MRPL is also looking to set up a Linear Alkyl Benzene plant with feed streams available from the refinery and OMPL (ONGC Mangalore Petrochemicals Ltd producing Para Xylene and Benzene using the feed stocks from MRPL).

Amid high volatility in the crude prices and substantial rupee depreciation against the dollar, MRPL is able to register the highestever gross revenue of Rs 68,834 cr in fiscal 2012-13, 19 per cent higher than previous year. How has MRPL been sustained the multi-pronged growth strategy ?
The revenue of the refinery is based on the crude and product prices prevailing in the international markets where refineries do not have any control. The higher revenue in the year 2012-13 was mainly on the account of increased processing crude rate viz 14.4 MMTPA vis--vis 12.82 MMTPA in FY 2011-12 and as well as increase in the international prices of petroleum products.

As the biggest buyer of Iran Crude, how is MRPL looking into the recent Iran's truce with world powers will impact the long-standing payment crisis for Indian oil companies for Iran crude, Indian energy insurance pool for covering refineries' risk and Brent crude price ?
MRPL Refinery has been processing Iran mix from the inception. Though MRPL has processed several grades of crude, Iran mix crude is proven to be more suitable considering the design configuration and product mix. Once phase -III units are fully on-stream MRPL has the advantage to process other opportunity crude.

Due to sanctions, MRPL reduced only its imports from Iran and future plans depend on how the things shape up with recent relaxation in place. MRPL is paying 45 per cent of its payment in Rupees and balance payment will be made once the payment channels are made operational. MRPL is following regularly with MOP & NG and GOI with respect to creation of the Energy Insurance Pool.