Focus on smaller refineries to overcome land acquisition challenges

01 Jun 2023 CW Team

Puri emphasised that expanding the country's refinery capacity to 450 MMTPA remains a priority, and specific policy decisions will follow suit. He stressed the importance of avoiding overly large refineries, as they often encounter complications related to land acquisition and other issues. The minister's remarks are particularly relevant considering the obstacles faced by projects like the West Coast mega refinery, which has experienced delays due to land acquisition hurdles, environmental clearances, and funding issues. Initially announced in 2015, the $44 billion project in Maharashtra's Ratnagiri district aimed to achieve a record-breaking refinery capacity of 60 MMTPA. However, conflicts between the previous Maharashtra government controlled by the Shiv Sena party and the BJP-led Centre resulted in significant delays for the mega project.

Additionally, the Rajasthan Refinery Project (RRP), India's largest upcoming integrated refinery and petrochemical complex, has also fallen behind schedule since its announcement in 2013. To address these challenges, the government is in the process of forming a core team that will tackle the hurdles, revive discussions, and engage multiple stakeholders in meaningful dialogues. This team will consist of officials from the ministry, oil marketing companies (OMCs), and other relevant parties.

India's current refining capacity stands at approximately 250 MMTPA, equivalent to about 5 million barrels per day (bpd). However, with projected fuel demand expected to double to 10 million bpd by 2050, the need to expand refinery infrastructure becomes crucial.

Hardeep Singh Puri, the Minister for Petroleum and Natural Gas, addressed the attendees of the energy summit organised by the Indo-American Chamber of Commerce-North India Council (IACC- NIC), highlighting the government's shift towards setting up relatively smaller oil refineries with capacities of approximately 20 MMTPA. This approach aims to overcome the challenges associated with land acquisition, which have plagued larger refinery projects. Puri emphasised that expanding the country's refinery capacity to 450 MMTPA remains a priority, and specific policy decisions will follow suit. He stressed the importance of avoiding overly large refineries, as they often encounter complications related to land acquisition and other issues. The minister's remarks are particularly relevant considering the obstacles faced by projects like the West Coast mega refinery, which has experienced delays due to land acquisition hurdles, environmental clearances, and funding issues. Initially announced in 2015, the $44 billion project in Maharashtra's Ratnagiri district aimed to achieve a record-breaking refinery capacity of 60 MMTPA. However, conflicts between the previous Maharashtra government controlled by the Shiv Sena party and the BJP-led Centre resulted in significant delays for the mega project. Additionally, the Rajasthan Refinery Project (RRP), India's largest upcoming integrated refinery and petrochemical complex, has also fallen behind schedule since its announcement in 2013. To address these challenges, the government is in the process of forming a core team that will tackle the hurdles, revive discussions, and engage multiple stakeholders in meaningful dialogues. This team will consist of officials from the ministry, oil marketing companies (OMCs), and other relevant parties. India's current refining capacity stands at approximately 250 MMTPA, equivalent to about 5 million barrels per day (bpd). However, with projected fuel demand expected to double to 10 million bpd by 2050, the need to expand refinery infrastructure becomes crucial.

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