India’s Mangalore Refinery and Petrochemicals (MRPL) has decided to cancel its plan for refinery expansion project in order to focus on increasing petrochemical production capacity, reported Bloomberg News.
The company is expected to invest up to $5.7bn (Rs470bn) in this endeavour.
The shelved expansion plan involved increasing production capacity of the MRPL’s refinery on the west coast from15 million tonnes per annum (mtpa) to 18mtpa.
MRPL managing director Sanjay Varma was cited by the news agency as saying that the latest decision was prompted by evolving global energy landscape predominantly driven by the increasing use of electric vehicles. The firm intends to focus on increasing production of chemicals that find applications in plastics and paints.
To realize this strategic objective, the company plans to make a significant investment in constructing a new production plant in the state of Karnataka, located in southern India, Varma said.
MRPL is planning to invest around $3.63bn to $4.84bn on the new plant, which is anticipated to be commissioned in the next three to five years.
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The company, which is majority owned by state-controlled Oil and Natural Gas Corp. (ONGC), also plans to invest a further $726m to $847m on smaller petrochemical units to help de-risk its future during the energy transition.
ONGC spokesman was quoted by Bloomberg News as saying: “The investment will contribute to ONGC’s overall spend of 1 trillion rupees to expand its petrochemical capacity to 8mtpa by 2030, from 3.4mtpa.”
Recently, The Economic Times reported that the Indian oil ministry was drafting a proposal to merge Hindustan Petroleum Corp Ltd and MRPL.