Numaligarh Refinery Limited (NRL ), Numaligarh
NRL's GRM during 2012-13 and 2013-14 were amongst the highest in the industry
P Padmanabhan, Managing Director,NRL

"During 2012-13 and 2013-14, NRL's GRMs were USD 10.52/bbl and USD 12.09/bbl respectively, which were amongst the highest in the Industry. We are always looking at opportunities to maximise value addition."

India has witnessed rapid proliferation of refining capacity in recent times . As on 1st April, 2014, India’s refining capacity was 215 MMTPA (4.4 million barrels per day). Capacity enhancement by another 90 MMTPA (1.9 million barrels per day) is in the pipeline. With such a significant capacity, India is expected to emerge as a global refining hub in foreseeable future, says Padmanabhan.

Current Capacities and Product Mix
Padmanabhan updates on the capacity and reveals that the existing capacity of NRL's refinery is 3.0 MMTPA. Product slate of NRL comprises LPG, Naphtha, Motor Spirit, Aviation Turbine Fuel, High Speed Diesel, Superior Kerosene Oil, Raw/Calcined Petroleum Coke and Sulphur. Paraffin and Microcrystalline Wax are being added to the product slate after commissioning of the Wax plant, which is in final stages of completion. "Over 85 percent of NRL's products are marketed in Northeastern, Eastern and parts of Northern India by its holding company Bharat Petroleum Corporation Limited (BPCL)," he asserts. While commenting on export basket, Padmanabhan states that with regard to international market access, NRL's products have since long been exported to Bhutan. Intermittent exports to Bangladesh through river route have taken place. NRL's Naphtha is being periodically exported through the Haldia port.

Padmanabhan says, "An agreement has been signed with an oil company in Nepal for supply of MS and HSD from NRL's Siliguri Terminal, located about 35 km from Nepal border. Supplies to this effect are expected to materialise very shortly. NRL is also pursuing an Indo-Bangla product pipeline for sustained product export to Bangladesh. This project is actively supported by the governments in both nations. Actions have been initiated for conducting route survey and detailed feasibility studies for the project. Export of auto fuels to Myanmar might well be another emerging possibility."

Niche Products
Commenting on niche products, Padmanabhan explains that after commissioning of the wax plant, NRL would be in a position to produce upto 50 TMT wax per annum, which would be nearly 40 per cent of domestic demand. "NRL's Wax could potentially be exported as well. NRL's Wax could be utilised in candle , cosmetic and pharmaceutical industries.

Needle Coke is another speciality product of NRL, for which trial production has started. Apart from above, possibility of producing other value-added products such as Linear Alkyl Benzene (LAB), Hydrogenated Pyrolysis Gasoline (HPG) and Para Xylene are being explored,” he continues. Needle Coke is primarily a requirement for steel and aluminium industries. LAB, HPG and Para Xylene are primarily utilised in detergent, fuels, petrochemicals and chemical industries respectively.

Refining - Petrochemical Integration
“Without any doubt a Refining - Petrochemical integration is the best practice in our industry," Padmanabhan emphasises. "It not only helps in value addition but also protects revenue generation by being a natural hedge against fuel or petrochemical price volatility. Venturing into petrochemicals production is expected to be a realistic proposition after implementation of the refinery expansion project," he explains further.

NRL is looking at synergies with Brahmaputra Cracker and Polymers Limited (BCPL) which is implementing the Assam Gas Cracker Project at Lepetkata in Assam's Dibrugarh District. The proposition would however be driven by factors such as adequate demand generation in proximate markets.

Refinery Configurations
Various refinery configurations for NRL's expansion project are being studied and the final configuration would be determined after finalisation of the Detailed Feasibility Report (DFR). NRL's Nelson Complexity Index consequent to refinery expansion is expected to be relatively high due to advanced secondary processing envisaged for incorporation. Although, higher complexity factor would mean higher investment, on the brighter side, it would permit increased value addition.

NRL has been on the forefront of energy conservation and environmental protection. The company's certification under ISO 50001 for energy management and ISO 14001 for environment management besides bagging three energy conservation awards from the Centre for High Technology (CHT) in 2013 bears testimony to the statement.

Challenges
The major challenge before NRL pertains to time bound implementation of the refinery expansion project after finalisation of the Detailed Feasibility Report. This project is essential for NRL to achieve economic scale of operations for ensuring sustenance and growth. NRL's refinery expansion from 3.0 to 9.0 MMTPA is envisaged to be facilitated through processing imported crude that would be transported from an Eastern port to Numaligarh through a dedicated pipeline. This is largely expected to address the feedstock availability issue. Process configuration and technology selection for the new units are expected to be the best available globally in order to maintain the company’s legacy of delivering high quality products.

Crude oil security, as Padmanabhan says, is another formidable challenge before Indian refiners. He is of the opinion that adequate supplies of crude oil at cost effective levels are imperative requirements for sustained profitability. The other challenge, particularly for those pursuing refinery expansions and in case of new refineries, pertains to obtaining statutory clearances in time bound manner. These are macro level issues to be addressed through representation with the government authorities. NRL's biggest challenge is "to maximise its profitability without depending on subsidies."