HPCL Capex

Hindustan Petroleum Corporation Limited (HPCL) plans to spend 175,000 crore in expansion and diversification in the next five years, with an annual expenditure of around Rs 14,000 to Rs 15,000 crore.

According to Mr. Rajneesh Narang, Director of Finance, around 25-30% of the capex will be for the renewable or gas-based power segment, Refinery would take another 20% and the balance would be for other downstream marketing projects.

The company will focus on enhancing its renewable energy portfolio, gas business, and value-added products in the downstream segment in the next five years. The company’s RE sector expansion would primarily focus on the solar and hybrid models segment.

Further, HPCL is planning to expand its refinery in Vishakhapatnam, intending to reach 15 mln tpa capacity from the current 8.3 mln tpa. The expansion requires around 167.5 acres of land. Of which 122.8 acre is located inside the existing refinery premises and the remaining 44.7 acre is located at the ATP (additional tankage project) plot. Once the bottom upgrade of the company’s Vizag unit is completed, HPCL expects an incremental gross refining margin of $3-$4 per barrel.

In the meantime, the 9 mln tpa refinery at Pachpadra in the Barmer district of Rajasthan is expected to be completed by March 2024. To date, about 74% of the physical completion of the Rajasthan refinery has been done with a capex of Rs 43,129 crore. The project will also produce 2.3 million tonnes of petrochemical products such as polypropylene, polyethylene, and aromatics.

As of September 2023, the company had 23 days of crude inventory and 30 days of marketing inventory remaining, it said. Considering the uncertainty in the global crude oil market and changes in India’s crude sourcing, the company does not see itself going for any material change in its sourcing of crude oil but plans to remain vigilant on crude, which will add more value to its business.

The company reported a consolidated net profit of Rs 5,826.96 crore in the quarter ended September, against a loss of Rs 2,475.69 crore in the same quarter last financial year due to improved marketing margins.

As of October 2023, according to Projects Today, HPCL was involved in 133 projects with a total investment outlay of Rs 74,418 crore. The total investment was spread across petrochemicals, refineries, renewable energy, and oil and gas pipelines.

Photo Source: www.hindustanpetroleum.com

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