Modi says India will keep expanding oil refining capacity
(Bloomberg) — India will continue to build new crude oil refineries in order to ensure supply chain security even as Western nations shut processing units
(Bloomberg) — India will continue to build new crude oil refineries in order to ensure supply chain security even as Western nations shut processing units, Prime Minister Narendra Modi said. “No new refinery has come up in the US in the last five decades and capacity in Europe has also been constantly declining,” Modi said Saturday, as he inaugurated the country’s first new refinery in a decade. He said India will continue to expand capacity. The 180,000-barrels-a-day greenfield refinery in the heart of Rajasthan’s Thar desert, which has 2.4 million tons a year of petrochemical capacity and was built at a cost of $8.3 billion, is likely to be the only new refinery commissioned globally this year, according to BloombergNEF analysts. The facility expands India’s refining capacity at a time when much of the West is shutting plants and investment elsewhere has slowed, highlighting New Delhi’s strategy of betting that robust domestic fuel demand, slower-than-expected electric-vehicle adoption and exports of refined products will continue to justify billions of dollars in new oil-processing infrastructure.
“The Barmer refinery adds a highly complex refining capacity in one of the world’s long-term oil demand growth drivers,” said Claudio Lubis, an analyst with BloombergNEF. “We expect India to lead global refinery capacity additions between 2026 and 2030, adding over 1 million barrels a day. This would account for just under a quarter of global capacity additions by the end of this decade,” he said. The new refinery becomes particularly significant in the aftermath of the Iran conflict, which renewed concerns over potential disruptions to crude shipments through the Strait of Hormuz. Although the plant does not reduce India’s dependence on imported crude, it expands the ability to process a broader slate of oils and bolster domestic fuel supplies while sustaining exports. Also Read | 8th pay commission to visit Mumbai railway depts to experience work conditions “It is because of investments in projects like this that India has been able to navigate the biggest oil supply shock in history,” Modi said.
Even as other nations rationed supplies and raised fuel prices due to the closure of Hormuz, India’s investments over the last decade ensured its economy remained well provisioned, he said. The Rajasthan refinery is a joint venture between state-run Hindustan Petroleum Corp. Ltd. and the Rajasthan government. It will primarily produce diesel, gasoline and petrochemicals, processing about 150,000 barrels a day of imported crude. Commercial operations began on June 22. Modi had originally been scheduled to inaugurate the project in April, but the ceremony was postponed after a fire broke out at the refinery’s crude distillation unit a day before the planned launch. The latest project will increase India’s installed refining capacity by about 3.5%, to 5.4 million barrels a day. The South Asian nation, the world’s fourth-largest refiner, is on track to expand capacity to 6.2 million barrels a day by the end of the decade as companies replace aging units with larger, more efficient plants at existing sites.
The BriefWire