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HPCL to invest Rs61,000 crore by 2021 on expansion projects

New Delhi: State-owned Hindustan Petroleum Corp. Ltd (HPCL) will invest Rs61,000 crore over the next four years in expanding and upgrading its existing refining capacity to meet higher quality fuel norms, the company said in an investor presentation.

HPCL is upgrading both its Mumbai and Visakh refineries to produce fuel meeting Euro-VI emission norms.

“Major planned investments in refinery, POL (petroleum, oil and lubricants) distribution and natural gas projects,” the company said in the presentation.

HPCL will invest Rs20,928 crore in expanding its Visakh refinery in Andhra Pradesh from 8.33 million tonnes per annum to 15 million tonnes by July 2020. Also, the Mumbai refinery is being expanded to 9.5 million tonnes a year from current 7.5 million tonnes at a cost of Rs4,199 crore.

The investment plans are irrespective of the proposal by Oil and Natural Gas Corp. (ONGC) to buy out the government’s 51.11% stake in HPCL. Since HPCL will turn into a subsidiary of ONGC if the proposal gets government nod, the investment plans would not change, an official explained.

The cabinet may in late July accord approval to ONGC’s proposal.

HPCL said it plans to expand Mundra-Delhi, Visakh-Vijayawada and Ramanmandi-Bahadurgarh pipelines to meet rising fuel demand. Besides, new LPG lines will be laid and bottling plants set up to cater to the increased demand for cooking gas.

HPCL said it is building a new 9 million tonnes per annum refinery-cum-petrochemical complex at Pachpadra in Rajasthan and a petrochemical complex at Kakinada in Andhra Pradesh. It also holds a 25% interest in the mega 60 million tonnes refinery which state-owned firms led by Indian Oil Corp. (IOC) plan to build on the west coast in Maharashtra. It, however, did not give costings of the projects.

Of the Rs61,000 crore to be invested till 2021, Rs23,400 crore will be in refining, Rs23,600 crore in marketing infrastructure and another Rs13,000 crore in joint venture projects.

The joint venture projects include the west coast refinery, petrochemical complex at Kakinada, a 5 million tonnes LNG import terminal at Chhara in Gujarat and a fuel farm facilities at Mumbai airport.

In 2017-18, the company has outlaid a capex of Rs7,110 crore as compared to Rs5,860 crore in 2016-17, the presentation said.

Besides the two refineries at Mumbai and Visakh, HPCL owns 14,412 petrol pumps and 4,532 LPG distributor agencies in the country.

The company, which had a net profit of Rs2 crore in 1973-74, posted a record Rs6,209 crore net in 2016-17.

HPCL said its borrowings have come down to Rs21,250 crore as on March 2017 from Rs33,789 crore in March 2013. Its net worth has risen from Rs13,726 crore to Rs20,347 crore in the same period.