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India sees naphtha glut as firms switch to gas
May 23, 2003 15:14 IST
India is expected to have four to five million tonnes of surplus naphtha in the next five years as industrial users and power generators shift to cheaper natural gas, industry officials said on Thursday.
Oil sector officials said refiners were drawing up export plans, planning investments to convert the fuel into lighter products and setting up petrochemicals plants to avoid a glut.
Domestic naphtha sales in 2002/03 fell six percent to 11.06 million tonnes in 11.7 percent a year ago.
"Naphtha surplus is expected to go up further in coming years," said Subir Raha, chairman of state-run Oil and Natural Gas Corp, India's largest exploration firm.
Naphtha demand is expected to decline as India will start importing five million tonnes a year of liquefied natural gas from Qatar from January, and Reliance Industries will start pumping gas from its recently discovered offshore field in the next few years.
Another official, who declined to be named, said gas currently accounted for eight per cent in India's liquid fuels/gas share of energy, but gas was expected to increase to 15 per cent in the next five years, replacing some 15 million tpy of liquid fuels.
"Every refinery will have to look very seriously at how to dispose naphtha," the official with a state-run refiner.
The naphtha surplus is expected to be more pronounced in western India, where LNG terminals are being planned by India's Petronet LNG and Royal Dutch/Shell.
This will hit naphtha sales from refineries in the western India as well as northern regions, which receive gas from a pipeline from the western coast.
Industry officials say Indian Oil's refineries at Koyali in the west and Mathura and Panipat in the north would face the naphtha glut.
Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd, which have refineries in Mumbai are also expected to see their naphtha customers turn to natural gas, officials said.
Naphtha accounts for about 11 per cent of India's total oil product sales.
The country has 17 refineries that can process 2.3 million barrels per day.
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