Crude oil in, refined oil out

India reaffirms its commitment to oil as it plans additional refinery capacity for the next decade

MarineTraffic Live Map image showing tanker traffic in December around India’s ports

India is expanding its crude oil refinery capacity to fulfill its economic expansion plans and meet its growing domestic energy needs. It’s the fourth-biggest exporter of refined oil products and third biggest importer of crude oil and in 2019 exported USD39.2 billion in refined petroleum, making it the fifth largest exporter in the world. In the same year, refined petroleum was also the country’s most exported product, said commodities data provider OEC.

Government-owned Indian Oil Corporation, which controls around one third of the country’s five million barrel-per day capacity, is following market trends and planning additional capacity.  Its chairman, Shrikant Madhav Vaidya, told Reuters in September that the country needs to add 2 million barrels per day (bpd) of refining capacity by 2030, in addition to the steps it is taking towards more sustainable fuel options. Reuters also reported a month earlier that junior oil minister, Rameswar Teli, announced that state refiners will invest 2 trillion rupees (USD26.96 billion) to increase oil refining capacity by 20% by 2025. 

Expansion projects are already being planned. Data analytics company, GlobalData, said in October that the country is “likely to start the operations of 85 crude oil refinery projects accounting for about 52% of the upcoming crude oil refinery projects in Asia between 2021 to 2025”. Two of the projects are new-build and 83 expansion projects of existing infrastructure.

Investments such as these are called for through Prime Minister Narendra Modi’s ‘Make in India’ nation-building initiative launched in 2016. Focussed on making India an easy place to do business, the initiative covers numerous sectors including pharmaceuticals, textiles and garments, ports and shipping, as well as oil and gas. 

Asia’s third biggest country currently has 23 refineries, 18 of which are public sector, three privately owned and two joint ventures. Together they provide a 248.9 million metric tonnes per annum (MMTPA) overall capacity.

MarineTraffic data follows the trend as India positions itself for an increase in refinery capacity with tanker arrivals and departures in November seeing a 9% increase this year over last year’s figures. There were 773 vessel arrivals in November 2020 and 830 in November 2021. These numbers are based on the arrival of crude oil, product,  oil  and chemical tankers of 5000 gt or more.

Tankers/ Indian ports  November 2020  November 2021
Arrivals 773 830
Departures 772 830

 

The country’s largest refinery, according to its Ministry of Petroleum and Natural Gas, is privately owned Jamnagar Oil Refinery. Combined, its domestic tariff area and special economic zone accounts for around 27% of the nation’s refinery capacity – almost as much as the total capacity across Indian Oil Corporation’s nine refineries.

India imports around 82% of its crude oil requirements and much of this is brought in by ship, placing huge reliance on the country’s network of ports, pipelines and storage tanks.

Situated in the Gulf of Kutch in Gujarat region on the country’s north-west coast, the Reliance Industries-owned Jamnagar site is conveniently positioned next to Port of Sikka, which handles mainly crude and refined oil cargoes to and from the refinery. 

MarineTraffic data suggests that Port of Sikka is India’s busiest port in terms of tanker movements, and in November this year captured 1,374 tanker arrivals and departures from its terminals, 37% more than Port of Kandla, situated on the northern side of the Gulf.

A snapshot of the MarineTraffic Live Map in December showing tankers in the Gulf of Kutch where the ports of Kandla and Sikka are situated

Whilst Sikka saw a slight drop in its tanker arrivals and departures from January to November in 2021 compared to last year’s figures, Kandla, realised an increase of nearly 20% during the same period.  

Meanwhile, 407 nautical miles down the west coast, one of India’s largest and most important ports for international trade, Mumbai, has also seen an increase in tanker calls in the past 11 months, compared to last year’s figures. In 2020 it saw 787 arrivals between January and November and in 2021, 827 arrivals. 

India’s five top ports by tanker arrivals and departures

Port    Activity        Jan – Nov 2020          Jan – Nov 2021
SIKKA    Arrival 1401 1374
SIKKA    Departure  1401 1374
KANDLA    Arrival 725 869
KANDLA    Departure  723 867
MUMBAI    Arrival 787 827
MUMBAI   Departure  791 830
HAZIRA   Arrival 547 646
HAZIRA   Departure  545 645
HALDIA   Arrival 480 588
HALDIA   Departure  479 585

 

Iran and Saudi Arabia are the main exporters to India, however, media reports suggest that India is trying to diversify its oil imports away from OPEC countries to avoid being stung by output curbs resulting in higher prices.

India has increased imports from the US, renewed its contract with Russia and according to Reuters is planning to import from Guyana.

MarineTraffic arrivals and departures data shows, however, that India remains committed to imports from the Middle East with the UAE and Saudi Arabia amongst the top countries of origin for tankers arriving at Indian ports over the first nine months of 2021. 

Country of origin Number of tankers – Jan to Nov 2021   Country of destination  Number of tankers – Jan to Nov 2021
United Arab Emirates 393   Saudi Arabia 604
Saudi Arabia 393   United Arab Emirates 558
Malaysia 374   Indonesia 376

 

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