By IANS,
Ahmedabad : The export-oriented Rs.270 billion (over $6.3 billion) refinery that Reliance Petroleum Ltd (RPL) is setting up in Jamnagar will incur half the cost of a similar Greenfield plant anywhere in the world, the company said in its 2007-08 annual report.
The report said the Paris-based International Energy Agency estimated the capital cost for new refinery projects to be “well in excess of $20,000 (per barrel) per day”.
In contrast, the Mukesh Ambani-headed RPL noted, the Jamnagar plant would incur a capital cost of less than $10,000 per barrel per day, or about half of what’s being spent to set up new refineries globally.
RPL said the refinery would be “one of most complex in the world”, implying it would be able to process almost all varieties of crude. To put it simply, the plant can process cheap, low-grade crude into petrol and diesel.
When adjusted for this complexity, RPL adds, the refinery “fares ever better”.
“Its capital cost of $665 per complexity barrel per day is much lower than the average capital cost of $2,600 per complexity barrel per day for new refinery projects globally,” the report said.
“This is a significant competitive advantage in the current industry landscape of increasingly heavy and sour new crude finds, which have led to wide light heavy differentials,” the report adds.
The greenfield refinery, with a daily production capacity of 580,000 barrels, is coming up adjacent to the existing refinery and petrochemicals complex of Reliance Industries Ltd. Full production will begin in December, ahead of schedule, RPL chairman Ambani has said in a letter to shareholders.
The refinery, together with the petrochemical complex, will constitute the Reliance group’s special economic zone in Jamnagar. The petrochemical plant will produce 900,000 tonnes of polypropylene annually.