India : Product Demand & Refining Capacity

• India will continue to be product surplus Import/Export requirement for crude/products to be quite substantial

Surplus refining capacity is expected to increase further by 2030

Oil Demand & Availability

• Widening gap between product demand and crude production from indigenous

sources; Heavy dependence on Imports

• Bridging the gap - Oil Equity abroad and fresh finds under New Exploration &

Licensing Policy

• Need for huge investments in refining, pipelines & Marketing infrastructure

Source: XIth Plan Document

India : Refining Capacity Growth

• As on April 1, 2009, India has a total refining capacity of 178 MMTPA including the newly commissioned refinery at Jamnagar)

• 18 out of the total 20 refineries in India belong to PSUs (with a capacity of a little over 59%)

• In the last few years, the Indian refinery sector has witnessed continuous capacity additions and the trend will continue in near future also; Projected capacity by 2017 is 302 MMTPA

MMTPA

* XIth Plan Projection

India : Refining Capacity Growth

Expansion Plans in India

Total Capacity , MMTPA

Refinery X plan

(2007)

XI plan

(2012)

XII plan

(2017)

IOC 60.2 81.4 94.7

HPC 13 32.9 32.9

BPC 22.8 30.8 30.8

MRPL 9.69 15 45

RPL 33 62 62

Essar 10.5 14 32

Nagarjuna 6 6

Total 148.9 240.9 302.2

As surplus products increases Coastal refineries will be forced to export more

Source : MoP&NG

Present approach of Indian Refiners

• Indian refiners are adding complex units like HCU, DCU, High Severity FCC , Alkylation, Isomerization units in order to increase value addition and product grades

• All new projects typically have Nelson Complexity index ranging from 10-14

• The switch to cleaner fuels due to newer fuel specifications led to addition of huge hydrotreating capacities

• Many refiners are adding units to meet BS III/BS IV grade auto fuels from April 2010.

• The Auto Fuel Policy is driving investment in clean fuel technology.

• Current export of higher sulfur HSD to ME/SEA may undergo corresponding shift to low sulfur exports

India’s Refining Expansion Options

• Bottoms upgrade

DCU with hydrotreating facilities

HCU once through with high severity FCC(petrochemical)

IGCC

RFCC with feed pretreatment

• Other products

Naphtha to petrochemicals

Kerosene fractions to LAB

• Product quality upgrade

Euro III & Euro IV

Coastal refineries to match variety of specs abroad

India as a Global Refining Hub

Asian Export Markets for India

• Oil Refining is considered to be a strategic industry by most Asian nations

• Largest growth is in China and India. Both likely to be self-sufficient. Any

potential gap is therefore temporary

• Similarly Thailand, Malaysia and Korea will cover demand growth by

revamp or new domestic refineries

• Best export opportunities with structural supply shortage

Vietnam new builds may lag demand

Indonesia funding limited for new domestic refineries

OtherSri Lanka, Bangladesh, Philippines, Pakistan,

India as a Global Refining Hub Contd...

India Cost Competitiveness for Asia

• Local supply is generally most competitive

• Low energy & tax, freight economics make ME most competitive exporter.

• India Capex and opex competitive offset by tax and transport dis-

economies

• Export potential to 6-8 countries Indonesia, China, Vietnam, Malaysia,

Bangladesh, SriLanka, Philippines

India as a Strategic location…

• Located in the major maritime route from Middle East to Far East

• Western and south-western coast - as transit landfall for middle-east crude

• Established refineries on western coast

• Geographical advantage to serve western and eastern markets

• Strong domestic demand provides an effective edge against fluctuations in

exports

Way Ahead……