GROWTH MODE

Mumbai, Feb. 7: Mangalore Refinery & Petrochemicals Ltd (MRPL) — a subsidiary of Oil and Natural Gas Corporation — is implementing a capacity expansion project over the next two years as well as one on refinery upgradation.

MRPL will invest close to Rs 9,157 crore in the next fiscal and the year after, taking the total investment to around Rs 10,647 crore in the Eleventh Five Year Plan (2007-12).

Once the projects are completed, the company expects them to not only yield better operational efficiencies but also higher profitability.

During the third quarter of this fiscal, MRPL’s gross refining margin (GRM) stood at $4.51 per barrel.

The company has already announced the expansion of its Mangalore refinery to 15 million tonnes from 9.6 million tonnes. This is expected to be completed by October 2011.

MRPL is also setting up a greenfield polypropylene project. It will produce 4.5 lakh tonnes of polymer grade propylene annually, and the project is expected to be completed by January 2012.

The company is targeting to not only improve its GRM, but also focus on Euro III/IV grade petro products and marketing. It is revamping its crude distillation, vacuum distillation and gas oil desulphurisation units.

Revamping these units is expected to result in better distillate yield, energy efficiency and higher proportion of Euro III/IV diesel.

Sources said the units were being overhauled keeping the changes in diesel specifications. Diesel specifications in the country are expected to move towards Euro III and IV this year. MRPL hopes to supply around 80,000 tonnes of Euro IV diesel in the domestic market.

MRPL is setting up crude oil processing units. According to sources, MRPL plans to process more sour and heavy crude and also the variety that has higher content of naphthenic acids, which are being sold at large discounts.

The ONGC arm is also considering ramping up the marketing of petro products. It has joined hands with Ashok Leyland Projects Services Ltd to form Mangalam Retail Services Ltd.