Page 130 - CW E-Magazine (7-1-2025)

Point of View

Jamnagar refi nery has no parallel in India …. and

that is a pity!

The commissioning of the Jamnagar refinery of Reliance Industries Ltd. (RIL) 25 years ago on December 28, 1999 – the birth date of its
founder Chairman, Dhirubhai Ambani – remains, as on date, a milestone in the development of India’s refining and petrochemical industries.
One that has not been emulated by any other company, though RIL itself has near doubled capacity since.
The start-up of the refinery, on-time, on-budget, and with a remarkable capital efficiency remains an enviable achievement in an industry long
dominated by the public sector whose projects almost inevitably ran behind timelines, went over-budget and were conservative in scope and
scale. For India too, RIL’s Jamnagar refinery was a stellar moment. In one stroke, it added 25% to the country’s refining capacity (entirely in the
hands of the public sector oil marketing companies, OMCs). Just as significantly, it made India not just self-sufficient in most refined fractions
(though kerosene and LPG continued to be imported) but turned the country to a net exporter of some refined products (notably gasoline and
diesel). This global impact has only increased since.
The project put India on the global refining map, no mean feat for a country that had (and still does) to depend on imported crude for meeting
most of its energy and feedstock needs. Singapore, with no crude production and export-oriented refineries in Jurong island, is probably the
closest parallel, though the projects there lack access to a sizeable domestic market and almost entirely serves international ones.

On time, on budget
The first phase of the refinery with a crude oil processing capacity of about 27-mtpa was set up in a record time of 33 months – ahead of
the planned schedule – despite the once barren site being ravaged by a cyclone. The speed of execution – led by the onsite presence of the
company’s seniormost executives – is manifest from the challenges another refinery also being set up at the time (by Essar Oil) nearby faced.
The latter, conceived and kicked off earlier, suffered badly on timelines, and faced cost escalations that ate into profitability, and eventually
forced the promoters (the Ruias) to sell out to Russian oil company, Rosneft (the refinery now operates as Nayara).

Another significant achievement was the cost competitiveness that stemmed from multiple factors. Scale obviously contributed in a major
way – at 27-mtpa this was comparable to the biggest refineries in the world. The coastal location facilitated the import of crude oil and exports
of processed products in a facile and cost-competitive manner. The large land parcel made available way back in 1995 far exceeded the needs of
the project at the time and has enabled a series of subsequent expansions in refining, petroleum coke (petcoke) gasification, and petrochemicals,
while leaving enough for a mega-township and a green belt, which has been famously turned into the largest mango orchard in the country.

The availability of this land parcel cannot be overstressed in a country where population pressures (and politics) have come to seriously
limit the growth ambitions of several mega-projects (more on this later). Today, the site includes the original refinery (since expanded to
33-mtpa), and an ‘only-for-exports’ unit with a slightly larger capacity of 35.2-mtpa, commissioned in December 2008. Together, they have
turned a desert to the largest refinery complex in the world!

Astute technology choices – not to mention hard negotiations – ensured the capital cost was significantly lower – 40% below other similar
builds in Asia, as per some, though this is likely an exaggeration. The third factor that contributed to competitiveness was the refinery’s
high complexity (21.1, as per a widely accepted industry scale), which enabled it to handle a variety of crudes – from the light Arab to the
heavy oil from Venezuela, and from the sweet to the sour (loaded with sulphur)! The company claims that since its commissioning it has
handled 216 different grades of crude oil from all parts of the world. A little-known fact is that the refinery is also India’s largest producer
of sulphur, with an annual output of about 700-kilotonnes (all recovered).

Focus on petrochemicals … from the start
The technology choices also enabled great flexibility in operations – permitting the refinery to switch crudes and product slates to meet
the dynamic needs of the market. Significantly, it was the first to be planned, designed and built with a strong focus on chemicals. This was
quite a departure from the ‘fuel focus’ of the existing refineries of the OMCs somewhat justified by their primary mandate, i.e., to meet the fuel
needs of a growing economy.

The petrochemicals focus also fitted in with the backward integration strategy that has been the hallmark of the company’s growth and
investments ever since it set up the first polyester plants in Patalganga in neighbouring Maharashtra. The para-xylene (PX) produced serves

130 Chemical Weekly January 7, 2025 Chemical Weekly January 7, 2025 131

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