The expansion project of the Numaligarh refinery in Assam, which is a joint venture between Bharat Petroleum Corporation, Oil India, and the Assam government, is expected to be completed by December 2025, according to the top management of Oil India.
Post its expansion, the refinery’s capacity is expected to increase to 9 million tonne per annum from the present 3 million tonne.
“The cost of our NRL expansion project project is around Rs 28,000 crore. Currently, the physical progress is 65%, and we are expecting that it will be completed by December 2025,” Oil India said in its earnings call. “Total equity contribution will be around Rs 5,500 crore for this project and out of this 69% will be Oil India’s share.”
The state-owned upstream company informed that Rs 19,000 crore has already been invested in the project. Post its expansion, the refinery will operate at 50-60% capacity before running at its full capacity from 2026-27 as it will need time to stabilise, the company said.
NRL is expanding its capacity by installing a 6 million tonne per annum capacity refinery and associated crude oil terminals and pipeline, considering processing of Arab Light and Arab Heavy grades of crude oil. The required additional quantity of crude oil is planned to be imported through Paradip Port in Odisha.
A cross country pipeline of around 1,640 km shall be laid from Paradip Port to Numaligarh for transporting 9 MMTPA of imported crude. The Assam government had in May 2021 increased its stake in the refinery from 12.35% to 26%.
The management also highlighted that the company’s crude oil production has increased by 6% in the first quarter of the fiscal and that of natural gas has increased by10% from the previous quarter. Oil India now plans to drill 78 wells in the present fiscal 2024-25 against 61 wells drilled in FY24. In the subsequent two financial years, the company has a target to drill 100 wells.
Oil India has reduced its gas production owing to sluggish demand from some consumers, including fertiliser plants, said Pankaj Goswami, director (operations) of the company. The firm expects gas output to increase after the completion of the gas pipeline connecting Oil India’s producing fields to the national gas grid.
The first phase of the pipeline being laid out by Indradhanush Gas Grid Limited (IGGL), a joint venture of IOCL, ONGC, GAIL, OIL and NRL is expected to be completed by December this year.
“In the recent past, we have been making more gas discoveries than crude oil. Next year, we might encounter more oil prospects rather than gas,” said the company.
Talking about the success ratio of its exploratory and development wells, the management said that the success ratio of its exploratory wells is in the range of 50-60% while that of development wells is at 100%.
From: financialexpress
Financial News
