India’s state-owned refining giant is seeking a $3.8 billion loan to expand capacity

Indian state-controlled refiner Bharat Petroleum Corporation Ltd (BPCL) is in talks with major local banks to secure a roughly $3.8 billion loan that it will use to expand the capacity of one of its refineries, it reported Bloomberg on Friday, citing sources with knowledge. of discussions.

BPCL is seeking to raise about $3.8 billion (320 billion Indian rupees) from lenders to boost capacity at its Bina refinery in the central Indian state of Madhya Pradesh, according to Bloomberg sources.

The refiner plans to invest a total of $5.8 billion (490 billion rupees) to add an ethylene cracking unit at the Bina refinery as BPCL and other Indian refiners look to boost their petrochemical production capacities.

If BPCL gets the loan from local banks, it would be the largest Indian rupee loan in the country this year, according to data compiled by Bloomberg.

Bank of India, Punjab National Bank and Bank of Baroda are some of the lenders the refiner is in talks with for the loan, which is expected to have a maturity of 15 years.

India has said it expects to increase its refining capacity by about 1.12 million barrels per day (bpd) each year until 2028 as it tries to meet growing demand for the fuel. India’s total refining capacity is expected to grow by 22% in five years from the current 254 million metric tons per year, which is equal to about 5.8 million bpd.

Separately, state-owned Indian refiners have begun discussing together the terms of a potential deal with Russia for the long-term supply of Russian oil, a government source with knowledge of the matter told Reuters in July.

“Joint negotiations of state refiners with Russia are already taking place,” the government source told Reuters.

India needs “predictable and stable” oil reserves amid expanding refining capacity, the source added.

By Tsvetana Paraskova for Oilprice.com

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