Numaligarh Refinery’s refining capacity to triple after expansion

The ongoing augmentation of Numaligarh Refinery Ltd (NRL), a division of Oil India Ltd (OIL), is likely to triple its crude oil refining capacity from the existing 3 million tonnes per annum (MTPA) to 9 MTPA, and will help increase regional supply of oil derivatives. The completion of this project will also boost India’s move towards strengthening energy self-sufficiency.

Hardeep Singh Puri, Union Minister of Petroleum and Natural Gas, commented, “NRL in Assam is undergoing expansion to increase its refining capacity from the existing 3 MTPA to 9 MTPA. Additionally, the company is also laying a 1,640 km pipeline from Paradip Port to Numaligarh to transport imported crude. Estimated to be developed at a capital expenditure of Rs 28,026 crore, the company has already received environment clearance.”

Presently under the administrative control of the Union Ministry of Petroleum and Natural Gas, NRL is a public sector oil company in Golaghat district. The Assam government increased its stake in the refinery in May 2021 from 12.35 percent to 23 percent. This additional stake cost Rs 2,187 crore, marking the highest-ever investment by the Assam government in any public sector undertaking (PSU). NRL is the largest of the four refineries operating in Assam and contributing significantly to the exchequer’s overall economic development.

Expansion to complete by 2025
NRL plans to complete its ongoing refinery capacity expansion by December 2025, a delay of over a year from its earlier scheduled completion in 2024. The delay can be attributed to the extended time taken for procedural clearances and financing scheduled expansion projects. A senior company official hinted that the project will be completed as per the revised date of December 2025.

Updating the progress made so far on this project, the official said that the refinery project is almost 60 percent complete. The Paradip-Numaligarh Crude Oil Pipeline project has also achieved 70 percent completion successfully. The company has already secured the required funding arrangements from identified lenders. Financial commitments for other allied projects have also been secured. “We are confident of achieving the successful completion of this expansion project by the revised deadline of December 2025,” he added.

The funding arrangements for this expansion project will be a major part of the Rs 35,000 crore capital expenditure lined up for the next five years. Work on the entire project will continue until December 2025. As part of this expansion project, NRL is setting up a separate polypropylene (PP) unit with a cumulative production capacity of 360,000 tonnes per annum. The company is awaiting an environmental clearance for this PP project.

The existence
Located at Numaligarh in the Golaghat district of Assam, NRL is spread over an area of 303ha (~749 acres). NRL is a joint venture between Bharat Petroleum Corporation (BPCL), Oil India, and the Assam government. The refinery was first commissioned in 2000 and has a current production capacity of 3 million tonnes per annum (MTPA). Now, it is being expanded to increase the capacity to 9 MTPA under the Numaligarh refinery expansion project (NREP). The expansion is being undertaken with an estimated investment of Rs 28,000 crore (US$3.5 billion), and is expected to be completed by 2025.

This expansion is a strategic move under the Hydrocarbon Vision 2030 by the Indian government, which will enable it to meet the growing petroleum product demand in the northeast. It will help to enhance energy security and promote regional economic growth in the north-eastern part of India. The remaining Rs 7,000 crore will be invested for other expansion and allied producers and services. The Numaligarh expansion project is focused on increasing the capacity and capabilities of the refinery to handle Arab light and heavy crude oils. In addition, the expansion will enable the motor spirit (gasoline) and high-speed diesel (HSD) produced from the new refinery train to meet the stringent BS-VI specifications.

Expansion projects
This expansion includes the installation of a 6 MTPA crude distillation unit (CDU) and vacuum distillation unit (VDU), and a 1.95 MTPA high-severity petroleum fluidized catalytic cracking unit (PFCCU). The PFCCU unit will yield LPG and propylene, the latter being used in a new polypropylene unit for high-value polymer production. Additionally, the expansion will include the installation of a naphtha hydro-treater (NHT), isomerization (ISOM) and naphtha continuous catalytic regeneration units (CCR), a diesel hydro-treating unit (DHDT), and an FCC gasoline desulphurization unit.

Other facilities for treating diesel and gasoline will be installed alongside the PFCC for secondary processing including an integrated residue upgradation facility (RUF) comprising an ebullated bed residue hydrocracker and integrated vacuum gas oil (VGO) hydro-treater. Supporting units such as a hydrogen generation unit (HGU), sulphur recovery unit (SRU), sour water stripper (SWS), amine recovery unit (ARU), tail gas treatment unit (TGTU), and a straight run-LPG treating unit are part of the comprehensive expansion strategy.

Alongside the refinery project, NRL is constructing two pivotal pipelines to meet the additional crude oil required for the expansion and to ensure the smooth operation of the refinery. Crude oil will be imported at Paradip Port in Odisha and transported through the 1,398km Paradip-Numaligarh Crude Pipeline (PNCPL). The pipeline will start from Paradip Port in Odisha and pass through West Bengal, Jharkhand, and Bihar, culminating at the Numaligarh refinery in Assam. A 654km product pipeline will link the refinery to a marketing terminal at Siliguri, West Bengal, for transporting refined products.

Project management
Technip Energies India, an engineering and technology company, was appointed as the project management consultant and engineering, procurement, and construction management (EPCM) contractor. Industrial and technology company Thyssenkrupp’s subsidiary Thyssenkrupp Industrial Solutions India was awarded a US$155 million Engineering, procurement, and construction (EPC) contract in November 2021 for the CDU/VDU, PFCC, LPG treatment, gasoline desulphurization, NHT, ISOM, and CCR units. Toyo Engineering India, a subsidiary of Toyo Engineering, was awarded an engineering, procurement, construction, and commissioning (EPCC) contract for the DHT unit in December 2021.

Honeywell UOP, a technology provider for petroleum refining and petrochemical production, is providing its UOP Distillate Union fining process to produce cleaner-burning diesel and increase crude oil conversion. Axens, a provider of solutions for the conversion of oil and biomass to cleaner fuels, was contracted to supply critical technologies for naphtha hydro-treating, continuous catalytic reforming (Octanizing), C5-C6 isomerization, and FCC gasoline selective desulphurization (Prime-G+) units. Chevron Lummus, a technology provider, was contracted to supply its LC-FINING technology with an integrated VGO hydro-treater. Engineers India, a consulting company, served as the environmental consultant and prepared the feasibility report for the Numaligarh refinery expansion project.

Highest profit
NRL registered the highest-ever net profit at Rs. 3,703 crore for the financial year (FY) 2022-23. The company ended FY2023-24 on a positive note in terms of physical and financial performance despite a setback of a fire during the April-July 2023 period. The company is getting back to operations after a planned turnaround of about a month. The refinery turnaround involves inspection and maintenance of all units in a holistic manner. The objective is to ensure smooth and efficient functioning of the refinery which will be carried out at regular intervals of four years.

The refinery bounced back after last year’s tragedy with resilience and was able to record a crude throughput of 2.51 million tonnes, equivalent to 100 percent capacity utilization for 10 months. Additionally, the 2G bio-refinery plant at Numaligarh is designed to produce 49,000 tonnes of bioethanol. This project has already been mechanically completed by the end of March 2024; with some residual jobs remaining. It is a pretty complex project and, therefore, would typically require three to four months for commissioning.


DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com