Indian state-owned Oil and Natural Gas Corporation Limited (ONGC), the biggest oil and gas explorer and producer in the country, is considering the construction of a new refinery with a capacity of between 200,000 barrels per day and 240,000 bpd, a source from the company told Reuters on Thursday.
ONGC has undertaken a pre-feasibility study on the refinery project, which is planned to be set up at the coastal city of Jamnagar in the western Indian state Gujarat, according to the source.
Jamnagar also hosts the huge refinery complex of India’s conglomerate Reliance Industries of billionaire Mukesh Ambani.
India is boosting its refining capacity to meet rising fuel demand. India, the world’s third-largest crude oil importer, has already seen its demand growth outpacing the increase in oil demand in China, where electric vehicles (EVs), electric trucks, and LNG-fueled heavy-duty vehicles are denting consumption of gasoline and diesel.
India aims to become a refining hub in Asia as it is boosting refining capacity and expects to continue relying on fossil fuels until at least 2040.
“Our existing refineries will increase in terms of capacity and they will also become regional hubs in terms of providing to other countries,” Indian Petroleum Minister Hardeep Singh Puri told Reuters at the end of last year.
India will lead global oil demand growth through 2050, boosting consumption by 8.2 million bpd between 2025 and 2020, OPEC said last week in its annual World Oil Outlook (WOO), which sees global oil demand growing from about 105 million bpd in 2025 to 123 million bpd in 2050.
In the near term, Indian refiners are on the lookout for funding to build new refineries, as they seek to expand their refining capacity to meet growing domestic demand for fuels amid higher-than-average economic growth and rising middle-class numbers.
For example, state-controlled refiner Bharat Petroleum Corporation Ltd (BPCL) is in talks with major local banks to secure a loan of about $3.8 billion which it will use to expand the capacity of one of its refineries.
By Michael Kern for Oilprice.com
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