Reliance Petroleum commissions new refinery at Jamnagar

Reliance Petroleum Ltd, a subsidiary of Mukesh Ambani’s Reliance Industries Ltd, brought on stream the world’s largest single-location refinery complex by cranking up a new exportsonly refinery next to its existing unit at Jamnagar in Gujarat. Together, the two units will have a combined capacity to process 62 million tonne of crude a year, or 1.24 million barrels a day. The new refinery, completed in a record 36 months at an investment of $6 billion, has been switched on at a time when demand for petroproducts is down in major global markets such as the US, Europe and Africa it wants to feed. It will be some time — which could stretch upto 3-4 months — before the unit starts running at full capacity. US major Chevron has a 5% stake in the refinery which deploys state-of-the-art technology capable of producing Euro-IV and Euro-V grade fuels even from the poorest quality crude. Ability to process poorer quality crudes, called heavy or sour in industry parlance, helps refineries earn more from refining as such crudes are cheaper than sweeter or lighter grades. Though the existing unit mostly processes heavy crudes, the new refinery may initially use lighter sweet crude (low sulphur) for up to two months before using higher sulphur crude when it becomes fully operational. In the first phase, it would produce diesel, naphtha and jet kerosene. Petrol production may start by February or the beginning of March. The crude distillation unit (CDU), the front end of a refinery which extracts various products like naphtha, kerosene, diesel and petrol, was started on Thursday and it normally takes 8-10 days for the first product to be ready for delivery, sources said, adding that it (the first product) would be in the market by early January. Initially, the refinery will produce Euro-IV grade petrol and diesel and will upgrade to Euro-V once more complicated units like the desulfurisation unit are fully operational. The company is likely to produce 31,000 tonnes of diesel per day, and 25,000 tonnes of petrol, sulphur, pet coke and naphtha per day. It will, however, put off producing fuel oil and polypropylene till February-end. “This refinery has been built with a significant capital cost competitive advantage,” the statement said, adding: “This record has been achieved in spite of the significant shortfall in engineering and construction resources that has impacted most other refinery projects globally.”