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How To Start Petroleum Oil Refinery In India


Importance of Petroleum Sector in India

One of India's eight-core businesses is the oil and gas industry, which has a significant impact on all other significant economic sectors. Since India's economic growth is closely tied to its energy needs, more oil and gas are expected to be needed, which will make the industry very favorable for investment. As of 2021, India remained the third-largest oil consumer in the world. The government has implemented a number of programs to meet the rising demand. It has permitted 100 percent Foreign Direct Investment (FDI) in a number of industry categories, including refineries, natural gas, and petroleum products, among others.

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Reliance Industries Ltd. (RIL) and Cairn India's presence in the region testament to the fact that it now draws both domestic and global investment. Primary energy consumption is anticipated to nearly double to 1,123 million tonnes of oil equivalent by 2021, according to the IEA's India Energy Outlook 2021, as the nation's gross domestic product (GDP) rises to US$ 8.6 trillion by that year.  On January 16, 2016, the Hon'ble Prime Minister Shri Narendra Modi announced the "Start-up India" program, which aims to nurture entrepreneurship and promote innovation by establishing an environment that is favorable to the expansion of start-ups. The Oil and Gas PSUs were instructed by MoP & NG to foster an ecosystem for innovation and support start-ups in their respective industries. The goal of the program is to inspire young people to create and to get PSUs to support them by creating incubation centers to make the most of the innovative ideas and solutions they come up with. The PSUs that are taking part in the Oil and Gas Sector's Start-up India initiative are ONGC, OIL, IOCL, BPCL, HPCL, EIL, GAIL, NRL, MRPL, and Balmer Lawrie. These PSUs have 320 Cr. in total start-up funding that has been pledged for three years.

  • The Government of India has recently announced development goals, including the installation of 175 GW of installed renewable energy capacity by 2022, the goal of achieving 100 smart cities, and the reduction of 10 percent in reliance on oil and gas imports by 2022, and the provision of clean cooking fuels.
  • India is currently the third-largest fuel consumer in the world, but it will soon overtake the United States because of its rising per capita consumption.
  • India uses only 6% of the primary energy produced worldwide, and its per-capita energy consumption is still below the world average.
  • A massive increase of almost 49 percent above the previous estimate of 28.08 billion tonnes, the estimated conventional hydrocarbon resources in 26 sedimentary basins totaled 41.87 billion tonnes (oil and oil equivalent of gas).
  • After China, India is the second-largest refiner in Asia. With more refineries than needed, it is becoming a refinery hub. Refinery output in the nation has climbed to 247.57 MTPA.
  • India plans to mix 20% ethanol into our gasoline products by 2023–2024. Under the EBP Program, the government encourages the use of ethanol made from sugarcane and food grains.

Current scenario of Indian Petroleum Industry

11 of India's 23 refineries are owned and operated by the Indian Oil Group, from the newest, Paradip, which has a capacity of 15 MMTPA and was dedicated to the country in 2016, to the oldest, Digboi, with a capacity of 0.65 MMTPA. Indian Oil's strength comes from its expertise in running the most refineries in India, adopting a variety of refining techniques, and utilizing cutting-edge refining technology. The Indian economy is based on its refineries. The country's demand for petroleum products is met by Indian Oil refineries, which primarily produce motor spirit, diesel, and aviation fuel for use as transportation fuels as well as kerosene and LPG for use as home fuels. Wax and other specialized items like lubricant oil base stocks are also made. For the downstream plastic and petrochemical sectors, the refineries also generate and provide polymers and petrochemicals.

Understand the Market

India is anticipated to provide one of the biggest global contributions to the increase in non-OECD petroleum consumption. The amount of crude oil imported increased significantly from US$ 70.72 billion in FY17 to US$ 94.3 billion in FY22 (April to January).

India was the second-largest refiner in Asia as of September 1, 2021, with a capacity of 248.9 million metric tonnes per annum (MMTPA). About 35% of the overall refining capacity was controlled by private enterprises. The largest domestic refiner, IOC, has a 69.7 MMTPA capacity. India produced 32.2 MMT of crude oil in FY22 through January. India consumed 201.26 MMT of oil-related products in 2021, an increase of 3.7% year over year. India's oil consumption increased from 4.65 million BPD in 2020 to over 4.9 million BPD in 2021. From October to December 2021, India imported 7.9 billion cubic meters (BCM) of LNG. The total import for the year was 24.46 BCM. India is the world's fourth-largest importer of LNG. The International Energy Agency (IEA) projects that India's natural gas consumption would increase by 25 BCM between now and 2024, growing by an average of 9% each year. The IEA claims that India's medium-term forecast for natural gas consumption is still positive because of expanding infrastructure and pro-environment measures. 40% of India's net demand increase is anticipated to come from industrial consumers. Sectors like residential, transportation and energy are also anticipated to be major demand drivers. India exported 56.8 MMT of petroleum-related goods for US$21.41 billion in FY21. Gas Authority of India Ltd. (GAIL) controlled the greatest portion (18,834 km or 57.56 percent) of the nation's natural gas pipeline network as of June 30, 2021. (32,718 km).

Arrange the Finance

If starting an oil mill business requires more funding than one has on hand, banks or regional venture capital groups may be able to provide the necessary financing. According to a senior official, the $30 billion, or 2 lakh crore, largest oil refinery in India will be built on the west coast by the state-run Indian Oil Corporation Ltd (IOC), Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL), and Engineers India Limited (EIL).

Appropriate Location for Petroleum Refinery

It's crucial to look for a site where you can set up an oil mill business that will be successful. Oil mills don't require a lot of areas. Numerous significant geographic considerations, such as the accessibility of raw materials, energy sources, water, labor, markets, and transportation infrastructure, have a role in where specific industries are located. However, in addition to such purely physical considerations that affect industrial sites, historical, human, political, and economic aspects are also beginning to outweigh the power of geographic advantages.

The raw material supplies were less important determinants of industrial sites for petroleum refineries. Because businesses had already established themselves in coalfields and were unwilling to transfer due to industrial stagnation.

Locational factors for oil refineries include:

  • Source site or Field-Based Refineries
  • Intermediate Locations
  • Near port locations
  • Market locations

Decide Oil Production Process

The act of drilling for natural gas or oil. Wildcat drilling is the practice of drilling for oil and gas in uncharted and unexplored territory. Production of oil and gas was made easier by modern equipment. As the largest contributor to the global economy, the oil and gas industry demands the highest quality in the design and construction of every piece of equipment. Engineered, with top-notch hardware and tools observing the main energy source

Wildcat well



Production Process:

Underground → Pipe  → Well head  → Tank → Contactors  → Flash Tank  → Carbon filter  → Heat exchanger  → Still  → Reflux  → Accumulator  → Re boiler  → Heat exchanger  → Pump  → inlet separator  → Contactor (Absorber)  → Accumulator  → Re boiler  → Glycol pump  → Heat exchanger  → Separator  → Pump  → Cooler  → Refinery.

Refinery Products and Processes

The essential function of oil refineries is to produce marketable hydrocarbon-based products and intermediates, from crude oil. Refineries produce a wide variety of products of different specifications, i.e., of

  • Fuels: Liquefied Petroleum Gases (LPG); Gasoline or motor spirit: Kerosene/ATF; Gas oil/diesel-oil; Light fuel-oils, Heavy fuel oils;
  • Petrochemical feedstock: Naphtha; Ethylene; Propylene; Butadiene; Benzene; Toluene, Xylene 
  • Other products: White oils; Lubricating oils, greases, and waxes; Bitumen; petroleum coke, wax, sulphur, etc. To get desired products from the available feedstock, oil refineries install a number of units/plants and these plants are supported by a number of other plants, which supply utilities - steam, air, power, water, hydrogen, etc. The major categories of refinery processes/units are listed below:
  • Physical separation processes: Atmospheric distillation; Vacuum distillation; Aromatics extraction; De-waxing/de-asphalting. Gas separation plant
  • Chemical conversion processes: Isomerisation; Alkylation, Reforming: Catalytic cracking: Hydrocracking. Thermal cracking/visbreaking: Asphalt blowing
  • Utilities and General facilities: Steam and/or power supply: Refinery liquid/gas fuel system; Flare system for disposal of vapor releases, Water, air, hydrogen, Nitrogen supply: Cooling water system; Wastewater and hydrocarbon slops treatment; Blending, storage, and loading facilities
  • Environmental Controls: Aqueous effluent treatment; Combustion and other air emission controls, Waste disposal; odor and noise control

Finding raw Material

It's crucial to choose a reliable raw material source for your company. As a result, the company needs to identify a reliable supplier from which to obtain its raw materials. These mostly consist of crude oil and gas condensate. The latter can be employed in refineries since it resembles a very light fraction of crude oil. The license requires for an Oil refinery

Licenses Required for Petroleum Products 

PESO license 

The Petroleum and Explosives Safety Organization (PESO) of India grants licenses under the name PESO. This institute, formerly known as the Department of Explosives, is in charge of the following:

  • Creating a plan for working with the oil industry.
  • Regulating the safety of hazardous substances, such as compressed gases. 
  • Explosives, and petroleum; establishing safety standards for the businesses that use compressed gases.

The PESO certification is evidence that the organization can follow the safety-related rules and regulations when manufacturing, transporting, importing, or trading hazardous chemicals. 

CTE or Consent to Establish 

The type of authorization needed to start or run manufacturing industrial operations is called consent to establish. Any business, operation, or procedure that releases wastewater, trade effluent, or is likely to cause air pollution must get CTE from the relevant state pollution control board.

Our team of compliance executives at GRC India assists you with your online application for CTE with the pollution control board.

CTO or Consent to Operate

Consent to Operate is another method of securing NOC compliance. In order to guarantee that their industry upholds standards regarding operations, manufacturers are needed to obtain this consent. All industries are required to obtain this permission in order to operate.

We at GRC India extend our services for CTO from the online registration with the pollution control board.

Under sections 25/26 of the Water (Prevention & Control of Pollution) Act of 1974 and section 21 of the Air (Prevention & Control of Pollution) Act of 1981, industries are obliged to obtain CTO and CTE licenses from the State Pollution Control Board.

Environmental Clearance 

Environmental clearance is a technique for obtaining government approval for undertakings that pollute the environment. The government has compiled a list of projects that require environmental approval, such as mining, thermal power plants, and infrastructure. The projects are divided into two categories in the EIA Notification: Category A and Category B. Category A projects are approved by the Ministry of Environment, Forestry, and Climate Change, whereas Category B projects are approved by the State Environmental Impact Assessment Authority. The environmental clearance procedure is required for 39 different types of projects and includes factors such as project screening, scoping, and evaluation. The major goal is to assess the project's impact on the environment and people and to try to mitigate or eliminate it.

Public participation is one of the key elements of a successful EIA process. It guarantees that the environmental clearance process is open and transparent while also enabling individuals who will be directly impacted by a project to voice their opinions on the proposal's potential effects on the environment and society. Almost all EIA systems incorporate some kind of public involvement. This could be accomplished through participation or public speech (which is a more interactive and intensive process of stakeholder engagement).

Fire NOC

The fact that petroleum refineries handle, process, and store several types of combustible materials at or above the flash point and ignition temperature makes them one of the riskiest enterprises. There are many risks, including those related to flammability, toxicity, explosion, physical risk, noise, ergonomics, and electrical risk, among others. Due to the handling and storage of highly combustible materials, petroleum refineries are naturally at risk of fire and explosion. Crude oil is a mixture of many hydrocarbons and is dangerous in and of itself because of its flammability and poisonous components. High pressure and temperature are a concern in the refinery process. Petroleum products are handled in pipelines, exchangers, pumps, vessels, and columns at or above their auto-ignition temperature; as a result, if there is a leak, a fire will start right away.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.


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I have worked for many internet blog pages and news portals. currently, I am working as a content writer for Corpseed Pvt. Ltd. I like to write blogs and articles in the field of different services.

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