HPCL Lays Out Rs 75,000-Crore Capex Plan For Five Years

NEW DELHI: State-owned Hindustan Petroleum Corporation Ltd (HPCL) plans to spend Rs 75,000 crore in expansion and diversification in the next five years with an annual expenditure of around Rs 14,000-15,000 crore, the company said on Tuesday.

“Around 25-30% of the capex will be for the renewable or gas-based segment, refinery would take another 20% and balance would be for other downstream marketing projects,” said Rajneesh Narang, company’s Director of Finance.

The company will focus on enhancing renewable energy portfolio, gas business, and value-added products in the downstream segment in the next 5 years. The company’s RE sector expansion would primarily focus in the solar and hybrid models segment.

Further, HPCL is planning to expand its refinery in Vishakhapatnam intending to reach 15 million tonne per annum capacity from the current 8.3 MMPTA. Additionally, the refinery expansion in Rajasthan is expected to be completed by March next year and will start production in the next calendar year, the company said.

“About 74% of the physical completion of the Rajasthan refinery has been done with a capex of Rs 37,000 crore of the total Rs 73,000 crore outlay.” Once the bottom upgradation of the company’s Vizag unit is completed, HPCL expects an incremental gross refining margin of $3-$4 per barrel.

As of September end, the company had 23 days of crude inventory and 30 days of marketing inventory remaining, it said.

Talking about the implementation of the common carrier regulation, the company informed analysts and investors that there has been no official communication in this regard, and it does not see it hampering HPCL’s pipeline business.

Considering the uncertainty in the global crude oil market and changes in India’s crude sourcing, the company does not see itself going any material change in its sourcing of crude oil but remain vigilant on crude which will add more value to its business.

“Vizag refinery will be capable of processing more heavy crude,” Narang said. “We will continue to look at opportunity crude.”

The company on Monday 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.

Average Gross Refining Margin (GRM) for the period Apri to September was $10.49 per barrel as against $12.62 per barrel during the corresponding previous period, the company said in an exchange filing.

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