India’s Bharat Petroleum Corporation Ltd (BPCL) plans to invest as much as $11 billion in a new refining and petrochemical complex in south India, the chairman of the country’s second-largest fuel retailer told Reuters in an interview.
“We feel there is a big opportunity in refining sector. India’s primary energy demand itself is also going to increase three to four times as its economy expands,” BPCL chairman G. Krishnakumar told Reuters this week.
The refiner has already launched some preliminary work on the project, including land purchase.
The complex is expected to have a refinery and ethylene cracker with a capacity of at least 9 million metric tons per year in the southern state of Andhra Pradesh, the executive said.
Currently, BPCL operates three refineries in India. The company and other Indian refiners are looking to boost their crude processing and petrochemicals capacity to meet growing demand in the world’s third-largest crude oil importer.
Earlier this month, BPCL’s head of refining Sanjay Khanna said that he refiner plans to raise its refining capacity by 10 million tons per year by 2028.
This year, India has already surpassed China as the world’s biggest oil demand growth driver, the U.S. Energy Information Agency (EIA) said in its latest Short-Term Energy Outlook (STEO) for December.
India is expected to account for 25% of global oil demand growth this year and next, the EIA reckons. This year, Indian oil consumption growth is estimated at around 220,000 barrels per day (bpd), compared to China’s 90,000 bpd growth.
In 2025, Indian oil demand is set to grow by 330,000 bpd. China will see a higher growth rate next year compared to this year’s weaker-than-expected increase. Yet, at 250,000 bpd growth in 2025, China will still lag India’s consumption increase, according to the EIA.
India surpassing China as the world’s top driver of oil demand growth isn’t surprising at all. The surprise, if any, came from the fact that this is happening a bit earlier than many forecasters had expected a year or two ago.
By Tsvetana Paraskova for Oilprice.com
