It will be Delhi’s biggest-ever investment in NE oil sector
GUWAHATI, Aug 27: What can be considered as the biggest ever investment in oil industry in North East, the Centre is actively considering to sanction Rs 22,000 crore plus expansion plan of the Numaligarh Refinery Limited (NRL).
“A Rs 22,594-crore expansion proposal is under active consideration of the Ministry of Petroleum and Natural Gas. Once this project is approved, we expect major changes in the entire organization as this will be the major investment of the company as well as in the oil industry of the Northeast,” the NRL’s annual report for 2017-18 says.
According to the annual report, the project includes construction of two cross-country pipelines - a 1,398km-long crude oil pipeline of 8 million metric tonne per annum (MMTPA) capacity from Paradip in Odisha to Numaligarh in Assam for transporting imported crude oil to the refinery. The other one is a product pipeline, 650km in length and of 6 MMTPA capacity from Numaligarh to Siliguri for evacuation of product.
The major weakness of the NRL, an outcome of the historic Assam Accord, is its sub-economic refinery size at 3.0 million MMTPA, the report says. Coupled with this, the logistical bottlenecks for importing limited quantity of crude oil to saturate existing refining capacity results in relatively higher operating cost per unit of crude processed.
The annual report, however, says the outlook for 2018-19 continues to be positive with growing demand of petroleum products in the NRL’s supply zone. Consumption of petroleum products in the Northeast has seen a high growth rate of around 16 per cent for motor spirit and 9 per cent for high-speed diesel.
Total consumption of petroleum products in the region reached 3.95 million tonnes in 2017-18, registering a growth of 12 per cent over previous year’s 3.52 million tonnes. “There is an opportunity to export products to neighbouring countries like Bangladesh and Myanmar,” the report says.
In 2017-18, the NRL exported 25,000 tonnes of gas oil to Bangladesh by rail from Siliguri and 30 tonnes high-speed diesel to Myanmar by road via Moreh-Tamu border.
A major future challenge for NRL lies in improving operational availability of its refinery so that capacity utilisation and production can be increased to take advantage of the growing market demand, says the annual report.