HPCL Approves Rs 4,679 Crore Lube Modernization Project

Hindustan Petroleum Corporation Ltd (HPCL) has given the green light to a “lube modernization and bottoms upgradation” project to be carried out at its Mumbai refinery, as detailed in an exchange filing. The objective of this initiative is to enhance the production capacity of lube oil base stocks (LOBS) from the current 475 kilotonnes per annum (KTPA) to 764 KTPA. This increase will be achieved by producing Group II+ and Group III LOBS, which the company describes as “superior grade” products.

In addition to expanding its LOBS production, HPCL plans to raise its bitumen output by approximately 487 KTPA. This will be accomplished by upgrading fuel oil into bitumen, a process that aligns with the company’s broader operational goals. The total investment required for this project has been estimated at Rs 4,679 crore.

The company has outlined a timeline for the project, stating that mechanical completion is expected to take 36 months, with an additional three months allocated for commissioning. Both timelines are calculated from the date the board approved the project.

On the financial front, HPCL reported a 77% increase in its standalone net profit for the quarter ending September 2024. However, the results fell significantly short of Bloomberg analysts’ projections, missing the mark by nearly 70%.

For the second quarter of fiscal year 2025, HPCL recorded a standalone profit of Rs 631 crore, a notable increase from Rs 356 crore in the preceding quarter. Analysts had forecasted a much higher net profit of Rs 2,008 crore. Furthermore, the company disclosed that its average gross refining margin during the quarter was $4.03 per barrel, a substantial decline from $10.49 per barrel reported in the previous quarter.

By WPB

Bitumen, Lube, Production