ONGC Petro additions Limited (OPaL) refinery.

Sep 2024

India’s Oil and Natural Gas Corporation (ONGC) is considering a major new investment in the country’s energy sector with plans for a large refinery and petrochemical complex in Uttar Pradesh. The proposed facility, which would have a capacity of 9 million tonnes per year, is estimated to require an investment of more than ₹700 billion ($8.3 billion).

According to people familiar with the discussions, ONGC has begun talks with Bharat Petroleum Corporation Ltd. (BPCL) about partnering on the project. BPCL owns a parcel of land in Prayagraj, which could be used for the refinery. Access to this land could help ONGC avoid common delays associated with land acquisition, a frequent obstacle for large infrastructure projects in India.

The move comes as India’s demand for fuels and petrochemicals continues to rise, driven by rapid economic growth and expanding industrial activity. While the country is also increasing its renewable energy capacity, the need for refined petroleum products remains strong, especially in populous states like Uttar Pradesh.

The Uttar Pradesh project is part of ONGC’s broader strategy to expand its downstream presence and tap into India’s growing energy market. If it moves forward, the refinery would not only boost local fuel supplies but also create jobs and support regional development.

BPCL is also exploring new refining projects, with both Uttar Pradesh and Andhra Pradesh under consideration. The company has hired a US-based consultant to help select the best site, and Andhra Pradesh is reportedly favored due to state-offered incentives, though Prayagraj remains a strong contender because of the available land.

ONGC and BPCL have not yet made public statements about the project, and discussions are ongoing. If approved, the new refinery could mark a significant step in meeting India’s future energy needs and strengthening the country’s refining capacity.

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