India’s future in refining: growth, complexity, and resilience The future relies on petrochemical integration, feedstock flexibility, and effective contaminant management – key factors for competitiveness
Leonard Chan Ketjen FCC
I ndia’s refining sector is entering a transformative era, driven by the country’s dual imperatives: a sustained rise in transportation fuel demand and an even steeper trajectory in petrochemical consumption. As the world’s most populous nation and one of its fastest-growing economies, India is expected to see transportation fuel demand grow between 2% and 4% annually through 2040, while petrochemical demand is projected to outpace GDP growth. This twin challenge – and opportunity – places India’s refiners at the heart of a complex energy transition. Urbanisation, rising incomes, and industrial expansion are fuelling a steady increase in mobility and logistics, underpinning the robust demand for gasoline, diesel, and aviation fuels. Simultaneously, the rise of a consumer- driven economy is catalysing demand for petrochemical derivatives used in packaging, textiles, automotive components, and construction materials. These trends are not transient; they reflect structural shifts that will define India’s energy consumption for decades to come. To meet these demands, the refining industry must expand capacity while evolving into integrated complexes capable of producing both clean fuels and high-value petrochemicals. The government’s vision to increase refining capacity from ~250 MMTPA to more than 300 MMTPA by 2030, as the first step, is an indication of what is needed to satisfy India’s energy and chemical needs in the next few decades. But capacity alone is not enough. The future lies in petrochemical integration, feedstock flexibility, and contaminant management – strategic
levers that will define competitiveness in the years ahead. Shifting refining and petrochemical landscape While India’s refining sector is poised for growth, global market dynamics present a more challenging backdrop. Oversupply in the petrochemical sector, driven by aggressive capacity additions in Asia and the Middle East, has led to low prices, margin compression, and underutilisation. Standalone naphtha crackers, especially those lacking integration or flexibility, are increasingly vulnerable. This underscores the importance of integrated refining-petrochemical complexes that can pivot between fuel and chemical production based on market needs. Simultaneously, underinvestment in conventional crude oil exploration has led to a shift toward unconventional sources and enhanced oil recovery (EOR) techniques. These methods often introduce novel contaminants, particularly iron, into the crude stream. Iron contamination poses serious risks to fluid catalytic cracking (FCC) operations, including catalyst deactivation and fluidisation issues. As refiners process more opportunity crudes to maximise margins, managing these contaminants becomes a critical operational priority. producing both clean fuels and high-value petrochemicals ” “ The refining industry must expand capacity while evolving into integrated complexes capable of
Refining India
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