Reliance Jamnagar refinery will cost half that of others

Ahmedabad: The export-oriented Rs 27000 crore (over $6.3 billion)
refinery that Reliance Petroleum Ltd (RPL) is setting up in Jamnagar
will incur half the cost of a similar Greenfield plant anywhere in the
world, the company said in its 2007-08 annual report. Also in the
news

The report said the Paris-based International Energy Agency estimated
the capital cost for new refinery projects to be "well in excess of
$20,000 (per barrel) per day".

In contrast, the Mukesh Ambani-headed RPL noted, the Jamnagar plant
would incur a capital cost of less than $10,000 per barrel per day, or
about half of what's being spent to set up new refineries globally.

RPL said the refinery would be "one of most complex in the world",
implying it would be able to process almost all varieties of crude. To
put it simply, the plant can process cheap, low-grade crude into
petrol and diesel.

When adjusted for this complexity, RPL adds, the refinery "fares ever
better".

"Its capital cost of $665 per complexity barrel per day is much lower
than the average capital cost of $2,600 per complexity barrel per day
for new refinery projects globally," the report said.

"This is a significant competitive advantage in the current industry
landscape of increasingly heavy and sour new crude finds, which have
led to wide light heavy differentials," the report adds.


The greenfield refinery, with a daily production capacity of 580,000
barrels, is coming up adjacent to the existing refinery and
petrochemicals complex of Reliance Industries Ltd. Full production
will begin in December, ahead of schedule, RPL chairman Ambani has
said in a letter to shareholders.

The refinery, together with the petrochemical complex, will constitute
the Reliance group's special economic zone in Jamnagar. The
petrochemical plant will produce 900,000 tonnes of polypropylene
annually.