Mangalore Refinery and Petrochemicals Limited (MRPL), a major Indian refiner, is shifting its focus on petrochemicals and has shelved plans to expand its refinery capacity to "de-risk" its future in the energy transition.
MRPL, whose parent company is Indian state-held company Oil and Natural Gas Corporation Limited (ONGC), is looking to boost its petrochemicals capacity, MRPL's managing director Sanjay Varma told Bloomberg in an interview published on Wednesday.
Expanding the petrochemicals capacity could cost up to $5.7 billion, or 470 billion Indian rupees, according to the executive.
The investment in petrochemicals capacity will help the refiner to "de-risk MRPL's future" in the energy transition, Varma told Bloomberg.
Petrochemicals are expected to be the major driver of oil demand in the coming decades, while the share of transportation fuels could start being eroded by the uptake of electric vehicles (EVs).
MRPL's refinery, with a capacity of 15 million tons per year, was planned to be expanded to have a capacity of 18 million tons annually. However, those plans are now on hold as the refiner looks to focus on petrochemicals. India is still not making enough petrochemicals domestically to meet all its demand.
MRPL's new petrochemicals plant in the southern Indian state of Karnataka is expected to come online over the next three to five years, the executive told Bloomberg.
Currently, MRPL operates an aromatic complex, a petrochemical unit capable of producing 0.905 MMTPA of Para Xylene and 0.273 MMTPA of Benzene. This aromatic complex is situated in the Mangalore Special Economic Zone (MSEZ) and is fully integrated with MRPL.
Apart from MRPL, major oil firms elsewhere, including Saudi Arabia's oil giant Aramco and U.S. supermajor ExxonMobil, are betting on petrochemicals to grow during the energy transition.
Saudi Basic Industries Corp (SABIC) and Saudi Aramco plan a joint project to convert crude into petrochemicals, Saudi Energy Minister Prince Abdulaziz bin Salman said at the end of last year.
By Charles Kennedy for Oilprice.com
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