Hindustan Petroleum Corp. Ltd is investing U.S.$551 million on expanding base stocks production at its Mumbai refinery, the company announced.
India’s refineries have capacity to produce about 1.695 million metric tons per year of API Group I (525,000 t/y), Group II (905,000 t/y) and Group III (295,000 t/y) base oil.
The upgrade aims to take advantage of India’s growing $6 billion finished lubricants market, which consumes about 2.87 billion liters per year, according to market research firm Mordor.
HPCL hopes the cash injection will improve production by 61% to 764,000 tonnes per year up from 475,000 t/y. The focus will be on Group II+ and Group III base oils, the company said.
The project entails installing an integrated hydrocracker and catalytic dewaxing unit, which should come online by 2028.
The company’s Mumbai refinery, first commissioned in 1954 and incrementally added to over the years, now accounts for more than 40% of India’s installed base oil production capacity.
HPCL’s investment was made feasible from strong performance over the past year, pulling in $1.72 billion in profit last year.