Vijay Soni | 30 Sep, 2016
Tell us something about the journey of BPCL Kochi refinery since its inception in 1966.
Fifty years ago, BPCL Kochi Refinery started fueling the nation with a capacity of 2.5 Million Metric Tonnes Per Annum (MMTPA). It was the eighth petroleum refinery in the country. Throughout its fifty years of operation which saw challenging times including ‘Oil Crisis’ of 1970s, Kochi Refinery ensured the availability of petroleum products in the market. On many occasions when there was shortage of petroleum products, it rose to the occasion by producing additional quantity of kerosene and diesel which were critical for the common man. Since the early 1990s, Government of India had been signing Memorandum of Understanding indicating the levels of performance expected from Kochi Refinery for each financial year. Kochi Refinery has consistently maintained an ‘Excellent Rating’ all through.
Presently, having commenced the commissioning of Integrated Refinery Expansion Project (IREP), Kochi Refinery is on the threshold of becoming one of the largest Public Sector refineries in the country with a capacity of 15.5 MMTPA. It is a happy coincidence that KR is reaching this stage of being a world- class refinery as it reaches the fiftieth year of existence.
What have been the significant milestones in the progress of the refinery?
Before the present expansion, the capacity of Kochi Refinery was enhanced four times. Secondary processing was commissioned in 1985 and thereby the value chain was improved. In late 1980s, Kochi Refinery ventured out to petrochemical sector by putting up facilities to produce Benzene and Toluene. A Diesel Hydro Desulphurisation Plant was commissioned in 2000. As part of Government decision to restructure the petroleum sector by aligning stand- alone refineries with public sector oil marketing companies, KRL became a subsidiary of Bharat Petroleum Corporation Limited (BPCL) in 2001. On 21 August 2006, KRL was amalgamated with BPCL. Thereafter, it became a Strategic Business Unit of BPCL. In 2007, Kochi Refinery commissioned a single point mooring facility for more economic receipt of crude oil in deep sea. As part of capacity expansion and for meeting the emission standards of Bharat Stage II/III, BPCL Kochi Refinery implemented Capacity Expansion & Modernisation Project Phase I & Phase II. Following the completion of the project in 2009-10, the capacity was enhanced to 9.5 MMTPA.
In 2011, BPCL Kochi Refinery commenced its prestigious Integrated Refinery Expansion Project (IREP) with a cost of Rs 16500 Crores. The Project which is in its final phase would enhance the refining capacity of Kochi Refinery to 15.5 Million Metric Tonnes Per Annum, upgrade auto fuels to eco-friendly Bharat Stage IV standards and improve the complexities of the Refinery.
During the conceptualisation of the project itself, we had taken great care of the environmental challenges
Globally, crude oil prices have seen great fluctuations in the last decade. Has this proved to be a challenge for BPCL Kochi?
Yes. The refining margin is decided by the product crack, more than the crude price. To a great extent, the challenge of crude oil price reduction was met through close monitoring of inventory management and synergy between BPCL group of refineries. The production pattern is ‘swinged’ as per prevailing market realities to maximize bottom-line.
In the coming years and decades, what kind of technological innovations do you see in the refining business? In this respect what are the plans of the Kochi refinery for advanced technology adaptation?
As we commence our journey towards the next fifty years, we are to have one of the largest and most technologically advanced refining complexes. It’s Nelson Index, which reflects the technological sophistication and the degree of complexity of refining processes, stands at 10.3 which is one of the highest in the industry. We have also started our Make In India Propylene Derivatives Petrochemical Project (PDPP) to produce niche petrochemicals. We are also going ahead with the Motor Spirit Block Project to produce fuels of Bharat Stage VI standards. We are always scanning the environment for emerging technology, that add value.
Have you tied up with any technology partners, such as scientific institutions, in India and possible partners abroad?
We have a long list of technology partners including UOP, Air Liquide Global E&C Solutions, Johnson Matthey Davy Technologies Limited and Mitsubishi Chemical Corporation. Presently we have tied up with Airpoduct & Chemicals based on the innovative Built-Own-Operate business model for facilitating the production of industrial gases for our operations.
Tell us something about the research and development (R&D) initiatives taken up at the refinery?
A R&D center came into being in Kochi Refinery, way back in 1988. The center had its objectives of optimization and simulation studies, testing process catalysts and developing value added products from various refinery streams. Our R&D Center had developed the unique product of Natural Rubber Modified Bitumen which is a superior grade for paving better roads Kerala, being a State with considerable area under rubber cultivation, development of the product turned out to be a boon to farmers. Since merger, Kochi Center is a part of our Corporate R&D Center.
The challenge of crude oil price reduction was met through close monitoring of inventory management and synergy between BPCL group of refineries
The integrated refinery expansion project will increase the refining capacity of the refinery from 9.5 MMTPA to 15.5 MMTPA. What is the scale of investment in this project and how much time will the expansion project take?
We are in the final stages of implementation of Integrated Refinery Expansion Projectand commissioning activities have commenced. The estimated cost of the project is Rs 16,500 Crores.
Do you think this expansion will have any environmental challenges? If so how do you plan to meet them given that Kochi refinery has a very good environmental track record?
During the conceptualisation of the project itself, we had taken great care of the environmental challenges. Initially, an EIA study was carried out. As part of the project, we are putting up a reverse osmosis plant to optimize the use of precious water in the plant. Advanced technology has been used to meet the new emission norms. A new modern effluent treatment plant is also coming up.
The Kochi refinery has a very good safety record. What is the secret behind operating a big refinery handling hazardous materials safely in such a successful manner?
The recent achievement of over 45 million accident-free man-hours stands testimony to the priority given to safety at Kochi Refinery. From training to retraining, and adhering to international standards in safety practices, both, offsite and onsite, Kochi Refinery has taken it as a mission to make safe living and working a natural mantra of its employees, contract workers, customers and the general public. Several awareness programmes have been successfully conducted to this effect with the results for all to see.
What are the challenges that you see in the years ahead for India’s hydrocarbons sector and for the Kochi refinery in particular?
The short-term challenges would be to put up facilities to meet the new emission standards of auto fuels, as spelled out in the auto fuels and vision policy 2025. In the long term, the very sustainability would depend on how the hydrocarbons sector moves towards greener energy. Hon’ble Minister of Petroleum and Natural Gas, Shri Dharmendra Pradhanji has announced the setting up of second generation Biofuel Refinery attached to BPCL Kochi Refinery. This long-term vision would help Kochi Refinery to sustain for the next 50 years.
(Prasad K Panicker is Executive Director in charge of Kochi Refinery owned by Bharat Petroleum Corporation Limited)
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