Reliance Industries is gearing up to invest around $13 billion in energy projects, with an aim to boost heavy crude oil refining process in India and beat China and Middle East's oil production capacity.
The company's Jamnagar Berhampur Refinery in Gujarat, which is also set to be included in this investment, has a capacity of refining 4 lakh barrels of crude oil per day (bpd), according to Reuters.
As per the company's plan, the new refinery will use five single point moorings, two for product shipments and three for crude oil import.
"The new refinery will increase Reliance's appetite for cheap opportunity grades and offer more dollars per barrel of oil processed," Praveen Kumar at Singapore-based consultancy FACTS Global Energy told the news agency.
While the company has not yet declared the details of project, analysts opine that the new refinery is expected to be constructed by the end of 2020.
Reliance operates the world's biggest refining complex in Jamnagar, where its two adjoining units can refine around 1.4 million bpd of oil.
In 2013, the company received a nod from the environment ministry to invest ₹773 billion ($12.8 billion) to expand its new refinery and polymer units. The company was allowed to switch the energy capacity for a 450 megawatt.
According to documents acquired by Reuters, the environment ministry in its letter to Reliance in May asked to meet certain conditions in order to receive approval for the projects. However, the process was delayed as the documents did not mention a specific date of approval. The company had cast reserves of $13.6 billion by end of June.
"It makes perfect sense to go aggressive in their core business of refining," said Jagannadham Thunuguntla, head of research and chief strategist at SMC Global Securities Ltd. "The company's balance sheet has enough firepower to finance refining and other businesses like telecom and retail."
India, the world's fourth largest oil consumer, plans to power its economic growth through focus on manufacturing sector, following Modi's mantra of 'Make in India'.
Reliance aims to beat China and Middle East crude oil manufacturing companies by expanding its refining plant in Gujarat.
"Recently the competitiveness of Jamnagar refining hub is gradually declining due to fast changing global scenario of product demand and stringent fuel quality," according to a proposal by RTI Act.