According to the OPEC’s World Oil Outlook for 2023, India is set to enhance its crude oil refining capacity by a substantial 56.6 million tonnes per annum over the next seven years.
The report indicates that, in 2045, India will be a major contributor to refinery operations in the Asia-Pacific region, excluding China. The region is anticipated to witness an increase of 7.1 million barrels per day (mb/d) in refining capacity over the long term, primarily due to robust demand growth. India, notably, stands as the largest contributor to capacity expansions within this region, as per the OPEC’s comprehensive analysis.
Refinery runs in India, referring to the volume of crude oil processed by refineries over a specific period, nearly rebounded to their pre-pandemic levels in 2022.
The report’s projections suggest that refinery runs in the Asia-Pacific region, excluding China, will experience a notable surge, from 16.5 mb/d in 2022 to just above 21 mb/d in 2045, representing an increase of around 4.5 mb/d. This growth is substantiated by robust demand dynamics, with India accounting for approximately 60% of this surge. Utilization rates are anticipated to reach a peak at around 88.3% in 2025, followed by a gradual decline to approximately 81.5% by 2045, as new capacity comes into operation.
The OPEC report underscores a continued trend in which refining capacities are relocating from developed regions to developing ones, particularly the Asia-Pacific, West Asia, and Africa. These three regions are slated to accommodate the largest share of medium-term capacity additions, amounting to nearly 90% of the total. The principal drivers behind this trend are robust demand growth and escalating product export strategies in these regions.
India, in particular, is set to bolster its crude oil refining capacity by an impressive 56.6 million tonnes per annum within the next seven years. Of this expansion, 84% is expected to stem from brownfield expansion, while 9 MTPA of refining capacity will be added through greenfield expansion.
As of now, India, the world’s third-largest consumer of crude oil, boasts a cumulative refining capacity of nearly 254 MTPA, equivalent to slightly over 5 million barrels per day (mb/d).
During FY23, Indian refineries processed 5.13 mb/d of crude oil, amounting to 255.2 million tonnes (MT), marking a notable increase from 4.85 mb/d or 241.7 MT in the previous fiscal year. As of August 2023, crude oil processing reached 5.28 mb/d or 21.9 MT (provisional). Between April and August in FY24, the processed crude amounted to 5.25 mb/d or 109.5 MT.
India’s crude oil transportation network as of September 2023 spans 10,938 km and possesses a capacity of 153.1 MTPA. In contrast, the transportation network for refined products extends over 22,973 km with a capacity of 149.3 MTPA.
The OPEC report also highlights India’s efforts to augment its existing facilities and focus on expanding in the petrochemical sector. The country’s ambitious goal is to attain 9 mb/d of refining capacity by the year 2030.
Notably, the largest ongoing refinery project in India, a 1.2 mb/d facility located in western Maharashtra, is being developed collaboratively by Aramco, ADNOC, and various Indian state-run enterprises. Due to recent land acquisition challenges, this mega-project could undergo redesign, potentially taking the form of several smaller refineries, as mentioned in the report.
