Growth
through Energy Products
Petroleum Refining and retailing
is the second link in RIL's drive for growth and
global leadership in the core energy and materials
value chain. RIL has 1.24 million barrels per
day (MBPD) of crude processing capacity, the largest
at any single location in the world
Jamnagar–Global
Petroleum Refining Hub
With the commissioning of the
new refinery in its Special Economic Zone (SEZ),
Jamnagar has now become the petroleum hub of the
world. With 1.24 Million Barrels Per Day (MBPD)
of nominal crude processing capacity, it is the
single largest refining complex in the world.
This is equivalent to 1.6% of global capacity
or one third of India’s capacity, and places
RIL amongst the top ten private refiners globally.
The second refinery, of larger
scale and complexity, was commissioned in a record
time of 36 months despite the fact that it had
to be executed under the most-challenging conditions
of scarce availability of project execution resources
due to overheated market conditions from 2005
to 2008. Building two of the largest and most
complex refineries at the same location, in a
decade, is unique in the world of global refining.
The SEZ refinery achieved a
flawless start, and the entire complex at Jamnagar
was synchronised in record time. All the processing
units of the SEZ refinery were successfully commissioned
and the facility operated in a stable manner.
It achieved peak capacity utilisation rate of
120% during the year.
The new refinery has been designed
to be more complex and flexible as compared to
the first refinery. This enables the new refinery
to capture more opportunities in value upgradation
– from the bottom-of-the-barrel to highly
value added products. The new refinery has the
world’s largest Coker and Fluid Catalytic
Cracker (FCC) plants. In addition, it also has
the world’s largest alkylation unit.
A Year of Stabilisation
after the Economic Meltdown
This was undoubtedly one of the
toughest years for the refining business globally.
Refining margins dropped to their lowest in a
decade. Weak demand, high level of inventories
and high crude prices led to weakening of product
cracks and refining margins across regions. The
industry also witnessed a sharp reduction in refining
runs and operating rates in addition to prolonged
maintenance shutdowns and permanent closures.
It was also a period that witnessed the highest
ever annual decline in oil demand. Crude oil and
product inventories were at the top end of 5 year
average.
Improved economic outlook, positive
industrial data and higher demand led to an improvement
in refining margins globally in recent months.
There was a disproportionate
impact on oil prices on the back of high demand.
There was a quick recovery from the lows of $
35/bbl in December 2008 to the high of $ 85/ bbl
in April 2010; one of the highest rises in the
last decade. The first half of the year saw crude
price sharply increase from around $ 50/bbl to
$ 70/bbl. Demand concerns, supply overhang and
the strengthening of the US dollar resulted in
subdued oil prices in the second half which remained
range bound between $ 70/bbl and $ 80/bbl. Crude
price closed at $ 80.7/bbl in March 2010, an increase
of 66% on a y-o-y basis.
Average Crude Oil Prices
($ / bbl)
FY
2009-10 |
FY
2008-09 |
|
High |
Low |
Average |
High |
Low |
Average |
WTI |
83.5 |
45.9 |
70.6 |
145.3 |
31.3 |
86.8 |
Brent |
80.5 |
46.5 |
69.6 |
144.2 |
33.7 |
84.5 |
Dubai |
81.3 |
47.2 |
69.5 |
140.8 |
36.4 |
82.8 |
(Source:
Platts) |
In this context, what set RIL
apart was the complexity of its refineries, highly
competitive operating costs and the ability to
maintain high operating rate of over 100%. The
Jamnagar refineries are among the largest in the
world, and also the most complex, with an average
complexity of over 12.0 on the Nelson Complexity
Index. RIL is among the top 10 private refining
companies globally and owns 25% of the world’s
most complex refining capacity. RIL has also become
the world’s largest producer of ultraclean
fuels at a single location. This resulted in RIL
delivering the best refining margin and achieving
the highest operating rate of any large refining
system globally.
Global Industry Overview
The world oil demand in 2009 stood at 84.9 MBPD,
a decline of 1.28 MBPD over 2008. As per the IEA,
OECD demand in 2009 for oil fell by 4.4% to 45.5
MBPD on a y-o-y basis while the non-OECD demand
rose by 2.1% to 39.5 MBPD. In January 2009, IEA
had forecast world oil demand to contract by 0.51
MBPD to 85.3 MBPD whereas the actual decline was
1.28 MBPD.
OPEC responded and targeted a compliance of 80-85%
to the production cut levels. However, some countries
increased their production towards the end of
the year resulting in the compliance level dropping
to 55% by the end of the year.
The world witnessed low levels of industrial
production and global trade. The economic downturn
reduced light product demand and resulted in high
light product stocks which have weighed on margins.
Strategic stockpiling of crude by China, as well
as companies playing the contango trade resulted
in a recovery in crude demand and prices.
Light-Heavy Differentials
Light-heavy crude and product differentials have
been compressed throughout 2009, resulting in
much weaker complex refining margins. This has
been driven by lower crude prices, reduced heavy
crude production and an increase in upgrading
capacity. Differentials are likely to remain muted
in the medium term due to a lighter crude slate
and increased upgrading capacity.
Arab light-heavy differential averaged around
$ 1.72/bbl making fuel oil crack stronger than
the previous year. While the global crude and
petroleum product markets continue to tighten,
the recovery is not even. Petroleum demand is
growing stronger in Asia and other emerging markets
as compared to those in the Atlantic basin. Moreover,
demand for light, higher quality sweet crude is
recovering faster than the demand for medium,
heavy and sour crude.
Before the recession, when a lack of sophisticated
refinery upgrading capacity boosted the demand
for light crude oil, light-heavy crude oil spreads
widened to record levels. But as the economic
downturn reduced demand, PEC cut back output of
medium-sour grades and new refinery upgrading
capacity came on line in 2009. This combination
resulted in a collapse of the spread between light
and heavy grades. More recently, light-heavy spreads
have widened as demand and utilisation rates have
started to improve.
There are four main drivers that continue to
support a trend for modestly wider light-heavy
spreads in 2010. First, demand for gasoline and
gas oil at the light end of the barrel is recovering.
Secondly, high inventory level and lower demand
for fuel oil in the cargo and bunker market is
impacting heavy-sour crude. Third, as OPEC increases
output to meet rising oil demand, supply of heavy-sour
crude barrels has increased, putting downward
pressure on prices and fourthly, temporary and
permanent shutdowns at refineries due to both
seasonal maintenance and low margins have reduced
demand for heavy-sour crude.
Demand for Petroleum Products
As per IEA estimates in April 2010, the fall
in OECD demand was largely attributed to Europe
and North America. Oil demand in OECD Europe fell
by 5.2% to 14.5 MBPD whereas demand in North America
fell by 3.7% to 23.3 MBPD in 2009. On the contrary,
demand in non-OECD markets remained resilient
with Asia, including China and India growing at
5.1% to 18.5 MBPD. Demand in other non-OECD markets
including Latin America, Middle East and Africa
remained stable to marginally positive by 1.2%
at 16.4 MBPD.
As per IEA estimates, world oil demand in 2010
is expected to rise to 86.60 MBPD, an increase
of about 1.67 MBPD over 2009. Demand growth in
non-OECD markets is expected to remain robust
and is expected to rise by 1.78 MBPD, an increase
of 2% to 41.24 MBPD. Asia, Middle East and South
America are expected to account for over 83% of
global demand growth.
Light Distillates
USA’s gasoline consumption has declined
by around 3% in 2008 and remained flat during
2009. The decline in US gasoline demand could
be due to increase in passenger fleet’s
fuel efficiency gain and high prices of gasoline
during 2008. Loss in gasoline demand in the US
demand also reflects the high unemployment rate
and consumers’changing driving pattern.
These trends are cyclical in nature and at least
part of the demand loss could return under an
improved economic environment wherein USA gasoline
demand could grow 0.5-1.0% a year in 2010 and
2011. Although advanced bio-fuels using bio-waste
or algae as feedstock, CNG vehicles, hydrogen
fuel cells and electric cars all hold interesting
promise, none of these technologies represent
a real threat to the gasoline market over the
next decade.
Equally important is the growth in demand for
gasoline in the non-OECD markets, large parts
of which are witnessing significant economic development
and increase in personal vehicle growth in Asian,
Latin American and Middle Eastern countries. There
is strong correlation between the non-OECD gasoline
demand growth and their GDP. As a result, worldwide
gasoline consumption could increase by an average
of 1.6% annually over the next 2 years.
Naphtha crack continues to dominate the South
East Asian markets with increasing Chinese demand
for naphtha crackers. With increased demand and
a relatively low rate of refinery capacity utilisation,
naphtha stocks have started to draw down across
all OECD regions and are below the seasonal averages.
As tighter supply and demand balance has driven
down inventories, naphtha cracks have continued
to appreciate in recent months.
A surge in petrochemical demand and a steeply
backwardated naphtha market suggest that, in absence
of major external shocks, a cyclical recovery
for the broader economy is imminent. Historically,
demand for naphtha, a key input into petrochemical
processes, has led demand for other petroleum
products.
Middle Distillates
Diesel margins were impacted by weak demand in
2009 as a result of economic slowdown, sluggish
industrial activity, capacity additions and distillate
stocks. Distillate stocks in North America are
at their highest levels in two decades, while
implied OECD distillate demand has contracted
6% in 2009.
The first half of the year showed stocking of
middle distillates in anticipation of an economic
recovery. However poor demand prevented draw downs,
resulting in massive inventories and this impacted
diesel cracks. Towards the end of the year, a
colder than normal winter triggered inventory
draw down and hence improving the cracks. Diesel
demand in Asia Pacific, particularly India over
specification changes from April 2010, helped
push the diesel cracks in the region to double
digits.
Diesel will be the growth fuel going forward,
since most of the incremental demand is expected
from non-OECD countries such as China and India.
The importance of diesel and gas oil should not
be underestimated, both in terms of refining profitability
and the impact on oil prices.
While oil prices are driven by a variety of factors
including strategic stockpiles, OPEC spare capacity
and strength of the US dollar, it is clear that
diesel demand is also a major driver of oil prices.
Diesel/gas oil demand is likely to gradually recover
in line with the global economy, but given the
existing level of diesel production capacity and
new capacity additions coming online globally,
diesel margins could recover slowly.
China and India are the only countries that are
set to grow distillation capacity and increase
their global market share. In terms of upgrading
capacity, it is China and India that should see
the most significant increase in global market
share.
As per IATA, passenger demand that fell by 2.9%
in 2009 is expected to grow by 5.6% in 2010. Cargo
demand, which fell by 11.1% in 2009, is expected
to grow by 12.0% this year. A strong year-end
recovery pushed load factors to record levels
when adjusted for seasonality. By January 2010,
the international passenger load factor was 75.9%
while cargo utilisation was at 49.6%. On the other
hand, tighter supply and demand conditions are
expected to see yields improve 2.0% for passenger
and 3.1% for cargo. Asia, Middle East and Latin
America are driving the recovery followed by North
America and Europe.
Global trade is recovering and with it, so are
jet-kero margins which are now at cycle average
levels. Economic activity in emerging economies
and higher global industrial production is providing
support to jet-kero demand. Industry estimates
indicate that industrial production tends to have
a stronger impact on jet-kero than on distillate
demand. Once inventories come down to more normal
levels, crack spreads could strengthen rapidly
on the back of a sustained upturn in global manufacturing
in 2010 and beyond.
Medium Term Demand Outlook
Strong non-OECD oil demand growth and discipline
regarding the ‘closed’ capacities
remain critical to the sustained recovery of the
refining cycle. While around 1.67 MBPD of global
oil demand growth (largely non- OECD) is expected
in 2010, about 1.0 MBPD of refining capacity is
estimated to ramp up in 2010, almost qually spread
over the four quarters. An estimated 1.43 MBPD
of refining capacity has been permanently shutdown.
However, some of this capacity could be resumed
in the future as many of the sites have not been
dismantled.
About 2.5 MBPD of refining capacity have been
cited as potential closure candidates or been
put up for sale. Most of these refineries are
located in Europe, and are more likely to be sold
than shut down due to non-commercial considerations.
While refining utilisation could show improvement,
more meaningful improvement in utilisation rates
is expected only in 2011, as oil demand grows
further. Despite divergence in oil demand between
OECD and non-OECD regions, it may be early to
differentiate refinery outlook between geographies
as the Asian refiners continue to export to the
West. Surplus in new refining capacity will begin
to get consumed by oil demand growth over the
next two years.
While the refining sector is moving through a
trough, without any of the closed capacities coming
back into operation, strong global oil demand
growth could pull refining into a sustained cyclical
recovery from 2011 onwards. Additional capacity
closures would auger well for the industry outlook
in 2010 as well.
In the medium term, structural drivers of demand
will continue to undergo change. Gas oil will
continue to be the growth engine followed by naphtha
and gasoline. Residual fuel oil is expected to
grow the least due to continued substitution by
natural gas in power generation and industrial
applications. By 2015, demand for gas oil is expected
to grow by 2.7 MBPD. The combined demand for naphtha
and gasoline is slated to increase by 2.0 MBPD
while demand for fuel oil is expected to grow
by 0.4 MBPD.
Demand for gasoline, which currently constitutes
25% of the world petroleum market could see slow
growth. The reduction in demand is more likely
in USA due to the impact of regulatory changes
that come into force in 2011. Higher penetration
of diesel cars could also impact demand for gasoline
in Europe. Japan could also experience a
reduction in gasoline demand as vehicle efficiency
improves. Increase in demand from non-OECD countries
will be underpinned by the rapidly growing vehicle
population in China, India, Brazil and other emerging
markets.
Demand for gasoline in USA is expected to shrink
over the medium term primarily because of structural
changes affected by the ‘Energy Independence
and Security Act’ bill which was introduced
in 2007. Another factor is the announced acceleration
of the USA motor fuel economy standard that increases
the Corporate Average Fuel Economy (CAFÉ)
from approximately 26.0 Miles Per Gallon (MPG)
to 35.5 MPG by 2016.
Clean Fuels
From 2009, the European Union (EU) has, in a
phased manner, migrated to 10 Parts Per Million
(PPM) sulphur gas oil. In addition, all ships
entering EU ports from 2010 are required to use
the fuels with a maximum level of 0.1% sulphur.
This change has allowed modern refineries like
RIL to place products in EU markets that have
already implemented the changeover.
China is likely to switch over to lower sulphur
transportation fuels in 2010 with mandated 150
PPM in gasoline (earlier limit of 500 PPM) and
150 PPM in diesel (earlier limit of 500 PPM).
In 2010, in a phased manner, India will also
migrate towards using transport fuel that is compatible
with Euro IV vehicle emission standards in 13
major cities, while the rest of the country will
migrate to fuels that match Euro III specifications.
Meanwhile, product specifications have become
more stringent in several regions of the world.
In most of the major oil consuming regions like
the EU, Japan and some Asian countries, sulphur
is virtually eliminated from gasoline and diesel
has maximum content of 10 PPM. In USA, this is
now 15 PPM for transport diesel and 30 PPM for
gasoline whereas Canada already has a 15 PPM limit
for both. In USA, most of the off –road
diesel will also be subject to the 15 PPM maximum
limit for sulphur in 2010. Also the Emission Control
Areas (ECAs) along the USA and Canadian coastline
proposed sulphur dioxide (SOx) limitation in bunker
fuel from current 15,000 PPM to 10,000 PPM starting
July 2010. The European limit on sulphur in gas
oil has also been reduced to 1000 PPM from January
2008. This continuing global trend of tightening
of product specifications across regions will
present new trade opportunities for global complex
refiners like RIL, with its ultra-clean product
capabilities.
In response to the global recession, China announced
a stimulus plan that included $ 73 billion for
refining and petrochemical industries. The funds
were to be used not only to increase the amount
of refining capacity but also to upgrade existing
capacity to produce cleaner fuels. The stimulus
funds were intended for projects that were already
under construction or at advanced planning stages.
This along with higher refinery run rates in China
has added pressure on refineries in the OECD region
thereby increasing the likelihood of further closures.
Demand for Petroleum Products in India
During the year, domestic demand for petroleum
products increased from 124.1 million tonnes to
130.5 million tonnes, reflecting a growth of 5.1%
in FY 2009-10. Indian refining capacity increased
to 179.96 million tonnes from 177.9 million tonnes
during the year.
| (In KT) |
FY 2009-10 |
FY 2008-09 |
Growth (%) |
| Diesel |
56,148 |
51,649 |
8.7% |
| Gasoline |
12,818 |
11,258 |
13.9% |
| ATF |
4,627 |
4,454 |
3.9% |
| LPG |
12,728 |
11,935 |
6.6% |
| Kerosene |
9,304 |
9,303 |
0.0% |
Total
(incl. others) |
130,542 |
124,171 |
5.1% |
Gross Refining Margin
Though signs of economic recovery supported crude
prices steadily, poor demand for products kept
the cracks lower than FY 2008-09 levels.
Gasoline cracks improved marginally by $ 0.2/bbl
to $ 6.7/ bbl in FY 2009-10, while both jet-kero
and gas oil cracks reduced by 67% individually
to $ 7.9/bbl and $ 7.3/bbl respectively. Naphtha
cracks improved from (-)$ 5.5/bbl to (-)$ 0.4/bbl
while Fuel Oil (FO) cracks became stronger by
$7.8/bbl to close at (-)$ 4.1/bbl.
Naphtha cracks recovered during the year due
to increased demand from crackers in the Asia
Pacific region. Demand for gasoline remained steady
in Asia, led by China registering record growth
in automobiles. Reduced air
travel and air cargo movements impacted the jet-kero
cracks. Gas oil cracks were under pressure due
to supply overhang on account of huge inventories
of middle distillates. The situation improved
from December 2009, first on the back of a spell
of cold weather in the Northern Hemisphere and
thereafter with improved demand. This helped drawdown
inventories resulting in ongoing improvement in
gas oil cracks. FO cracks remained strong throughout
the year.
RIL’s Gross Refining Margin (GRM) for
the year was at $ 6.6/bbl, a premium of $ 3.1/bbl
over the Singapore complex margin and an ongoing
outperformance of key global benchmarks.
Refinery Capacity and Utilisation Trends
Several refinery projects planned and under
construction prior to the world recession have
come online in 2008 and 2009. As per E.M.C.,
total new primary distillation capacity commissioned
in these two years is over 4 MBPD, with most
of them getting operational in 2009, located
in Middle East and Asia.
With drop in demand and low refinery margins,
refiners all over the world are reducing operating
rates. The average capacity utilisation rates
in FY 2009-10 for refineries in North America,
Europe and Asia were at 81.2%, 75.8% and 82.0%
as compared to 83.6%, 82.8% and 83.2% respectively.
Performance Review
The consolidation of Reliance Petroleum Limited’s
refining assets with RIL’s existing refinery
in Jamnagar gives RIL a capacity of 1.24 MBPD,
which is about 1.6% of the world’s refining
capacity.
What set RIL apart in the context of global
refining is the complexity and the scale of
its refineries. The two Jamnagar refineries
that RIL operates are not only among the largest
in the world, but also are the most complex,
with an average complexity of more than 12.0
on the Nelson Complexity Index. Following the
merger, RIL now owns 25% of the world’s
most complex refining capacity and has become
the world’s largest producer of ultra-clean
fuels at a single location.
To support India’s strong growth with
a drop in global demand, RIL surrendered the
Export Orientated Unit (EOU) status for its
660,000 barrels per day refinery. This has maintained
high utilisation.
Since inception a decade ago, RIL has been
able to outperform the benchmark Singapore complex
refining margin. Margins have been comparable
with other complex refiners globally and significantly
higher than refiners in China, where margins
are regulated by the Government.
There are two ways in which RIL has been able
to outperform the benchmark index. The complexity
of the Jamnagar refineries allows the Company
to process heavy and sour crude from all over
the globe reducing its feed costs. RIL also
has the ability to place products in the markets
of Europe, Asia and USA to generate the best
margins.
RIL processed 60.9 million tonnes of crude
and clocked an average utilisation of 98.3%,
significantly higher than the average utilisation
rates for refineries globally. Exports of refined
products were at $ 20.9 billion. This accounted
for 32.8 million tonnes of product as compared
to 22.6 million tonnes in the previous year.
Production of Petroleum Products [in
Kilo Tonnes (KT)]
| Product |
FY 2009-10 |
FY 2008-09 |
| Gases & distillates |
51,400 |
28,000 |
| Fuel oils and solids |
9,400 |
4,450 |
| Total production |
60,800 |
32,450 |
Technology Development and Innovation
At RIL, a team of more than 100 engineers and
scientists is driving various Research and Technology
(R&T) efforts in the refining arena. Jamnagar
refinery has set up a full scale FCC pilot plant
for evaluation/selection of FCC catalysts and
additives, along with the state-of-the-art laboratory/analytical
facilities for advanced crude characterization,
NMR /Infrared Spectroscopy, Inductively Coupled
Plasma (ICP) analyzer etc.
R&T has been making extensive use of various
advanced techniques like simulation, mathematical
modeling, Computational Fluid Dynamics (CFD)
modelling, and many others to support refining
operations, improve product quality, optimise
yield of high value products like propylene/LPG/gasoline
from FCC unit and enhance bottom-of-the-barrel
processing. Further to improve refinery margin,
R&T has developed technology for processing
heavy and high TAN opportunity crudes.
RIL’s SEZ Refinery
RIL commissioned its new refinery in the SEZ
at Jamnagar. This refinery has the capacity
to process 580,000 barrels of crude oil per
stream day. The facility also has the capacity
to produce 0.9 million tonnes of polypropylene
per annum. The new refinery is the sixth largest
in the world and has a Nelson Complexity Index
of 14.0, making Jamnagar the largest and most
complex refinery site in the world. This refinery
has more than 40 process units apart from a
large network of offsites, utilities and other
Infrastructure facilities.
The SEZ refinery has a unique design and path
breaking configuration with ‘Clean Fuels’
process plant. It is designed with high level
of flexibility to change grades based on economy
and to capture margins based on market dynamics.
The new SEZ refinery is the first refinery in
India to produce Euro-IV grades of gasoline
and diesel. The refinery has been the first
in India to produce large number of US grade
gasoline such as R-BOB, RFG, US conventional,
95 Oxy-free and Ultra Low Sulphur Diesel (10
PPM Sulphur) which are being supplied to the
US and European markets.
The new refinery has some of the world’s
largest units:
-
FCC with Rx Cat technology
for maximum propylene production
-
Coker – with most
advance safety features.
-
Alkylation plant (based
on Sulphuric acidtechnology)
-
Light Cycle Oil (LCO) hydrocracker
The refinery complex is designed for total
water conservation. It has its own desalination
plant and carries out complete recycling of
effluent with zero discharge. It has a state-of-the-art
centralised control centre, laboratory, fire
station and a large green belt. The green belt
has been developed across the boundary of the
refinery and has got 2.3 million trees and 0.8
million mangroves. It has over 1 million mango
trees – probably the largest mango plantation
in Asia.
It has been an exemplary, historical and a
flawless start-up of a chain of plants in a
safe, secure and an incident free manner. The
activities were carried out in a seamless manner
such that not even a single day was lost between
construction completion and commissioning of
the refinery. All units were commissioned in
shortest possible time schedule in spite of
the tight interdependencies between various
units.
The refinery attained a significant milestone
by fully stabilizing the operations in a record
time. All its process units have successfully
demonstrated their ability tooperate smoothly
and safely, producing high quality transportation
fuels. All key processing units at the refinery
are operating at their peak design capacity.
The refinery has successfully processed more
than 60 types of crude oils, including difficult
crude oils within a few months of its start-up,
thus reflecting superior quality of assets and
capabilities.
Viewed in the context of market conditions,
this is a significant achievement and reflects
RIL’s ability to produce and place high
quality, value-added products in a challenging
market environment.
Domestic Petroleum Marketing
Consistent high rate of growth over the past
few years resulted in deficit of key petroleum
products in the country. With planned introduction
of Euro-III and Euro-IV grade of transportation
fuels, these deficits are likely to increase
going forward. RIL decided to convert its refinery
from EOU to Domestic Tariff Area (DTA) to meet
these domestic deficits and commenced supplies
to PSU oil companies from May 2009.
With softening of crude and product prices
last year, RIL restarted domestic petroleum
retail operations in southern and western states.
Domestic retail marketing however continues
to suffer due to lack of level playing field
to private oil marketing companies. Hence operations
in all geographies and scaling up of sales would
only be possible once prices are market determined
or level playing field is brought for private
players as well.
In February 2010, the Kirit Parikh committee
made recommendations to the Government to allow
free market pricing for gasoline and diesel,
and to raise administered prices for kerosene
and LPG. The report recommends raising LPG prices
by Rs. 100 per cylinder and at least Rs. 6/litre
for kerosene. It is yet to be seen whether any
of these suggestions will be put into practice
and what affect that will have on petroleum
product demand in India.Any positive step by
the Government along the lines of these recommendations
will give a positive thrust to RIL’s retail
business.
Aviation Turbine Fuel (ATF) demand has seen
some stabilisation with a growth of 3.9% in
FY 2009-10 as against negative growth of 1.9
% in FY 2008-09. RIL is present at 24 airports
in India which collectively account for 30%
of total ATF demand in the country. RIL is seeking
to expand its network aggressively to have its
presence at 30 airportswhich will cater to 95%
of total civilian air traffic demand.
The demand for petcoke in India is presently
about 8 million tonnes p.a. with Gujarat and
Rajasthan accounting for about 75% of the domestic
demand. Current demand in the country exceeds
overall production capacity despite the commissioning
of the Coker at the new refinery in Jamnagar.
During FY 2009-10, RIL sold a total of 5.34
million tonnes of petcoke. With the commissioning
of new capacities in the cement industry as
well as the setting up of captive power plants
by several major industrial units, the demand
for petcoke is set to increase.
The annual sulphur demand of 3.4 million tonnes
in India is met from domestic production as
well as imports. RIL Jamnagar production of
0.85 million tonnes in FY 2009-10 was sold primarily
in domestic market supplemented by some exports.
The fertilizer sector consumes sulphur in various
forms and the demand for elemental sulphur in
this sector, particularly from Single Super
Phosphates (SSP) is likely to increase due to
the encouraging Nutrient Based Subsidy (NBS)
policy announced by the Government that has
introduced subsidy for sulphur as a nutrient
in fertilizers to improve the sulphur deficiency
in the soil.
GAPCO
RIL consolidated the operations of its GAPCO
subsidiaries in East Africa. GAPCO owns and
operates large storage facilities and has a
retail distribution network in several countries
including Tanzania, Uganda and Kenya. It owns
and operates large coastal storage terminals
in Dar-e-Salaam (Tanzania), Mombasa (Kenya)
and an inland terminal at Kampala (Uganda) besides
having well located depots in East Africa. It
also has a well located network of retail outlets
in Tanzania, Uganda and Rwanda.
Special initiatives to improve the supply infrastructure
and sales volumes have led to superior productivity
and higher throughputs. The Mombasa terminal
has been augmented to receive Premium Motor
Spirit (PMS), thus enabling GAPCO Kenya to make
a combined diesel and petrol offering to the
retail and independent sectors in Kenya.
GAPCO is also emerging as a key supplier to
neighbouring countries and has signed a term
contract for supplies to Zambia from its Dar-e-Salaam
terminal in Tanzania.
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