BPCL Board approves Rs 11,130 crore for Kochi petrochemical unit

Bharat Petroleum Corp Ltd (BPCL) Friday said its board has approved an investment of Rs 11,130 crore for setting up a petrochemical unit at its Kochi refinery in Kerala.

BPCL's Kochi refinery at its recent expansion to 15.5 million tonnes per annum capacity produces 5,00,000 tonnes of polymer grade propylene.

Half of this propylene is utilized for the manufacturing of niche/specialty petrochemicals like acrylic acid, oxo alcohol, and acrylates, which find applications in areas like paints and coatings, adhesives and solvents.

From the balance, BPCL plans to produce value-added petrochemicals.

"The Board of Directors of BPCL at the meeting held on September 28 has approved the proposal for setting up facilities for production of polyols, propylene glycol and mono-ethylene glycol at Kochi refinery at an estimated investment of Rs 11,130 crore," BPCL said in a regulatory filing.

While Polyether Polyols are used to make polyurethane foams, coatings, and adhesives, Propylene Glycol is used in the manufacture of fiberglass -reinforced plastics, cosmetics, lubricants, surfactants in dyes and humectants for food products.

Mono Ethylene Glycol (MEG) is used in packaging, films, and textile fibers.

BPCL believes petrochemicals market in India is fast growing and profitable with open market pricing with a hedge for refining.

"Combined refinery-petrochemical complexes can be the best option for global competitive advantage, due to the availability of low-cost feedstock from the refinery," it said in the project's preliminary feasibility report.

Currently, there is a limited production of Polyols/Propylene Glycol (PG) in India due to limited availability of an important intermediate Propylene Oxide (PO), which requires Propylene feedstock.

"The niche Propylene derivatives petrochemical project offers an attractive opportunity for BPCL for utilizing the balance polymer grade propylene feedstock from Kochi facility to meet this demand for niche petrochemicals," it said. "The proposed project will be a self-contained facility and will be set up contiguous to the Kochi Refinery of BPCL, in order to achieve synergies of integration with feedstock source, a vital element in the success of a project".