MRPL starts merger with OMPL

Mumbai: Mangalore Refining and Petrochemicals Ltd (MRPL) on Wednesday said it has started the process of merger with ONGC Mangalore Petrochemicals Ltd (OMPL) which operates an aromatics complex next door.
Both MRPL and OMPL are subsidiaries of the Oil and Natural Gas Corp. Ltd (ONGC), India’s state-owned oil exploration firm.
A note issued by MRPL on Wednesday said the board of MRPL has approved the scheme of amalgamation of OMPL with the company, which will give higher flexibility and value to optimize the former’s gross refining margin (GRM).
GRM is the difference between the price at which refiners purchase crude oil and the price at which they sell the end product after refining, and is a measure of a refinery’s profitability.
MRPL traditionally enjoyed better GRM than oil marketing companies (OMCs) like Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL) but since last year, its GRMs have fallen below the OMCs.
According to a May 2015 report by the Petroleum Planning and Analysis Cell (PPAC), for the three years from 2011-12 to 2013-14, MRPL posted a GRM of $3.57 per barrel as against $3.68 per barrel of IOCL, $4.15 per barrel of BPCL and $2.63 per barrel of HPCL. However, in fiscal 2014-15, MRPL posted a negative GRM of 0.64.
The proposed amalgamation can lead to rationalization of costs across petrochemical product streams and give MRPL access to a wider range of products.
Located in the Mangalore Special Economic Zone, OMPL’s 442-acre aromatics complex was built at a cost of Rs.5,750 crore. The plant started operations in October 2014 and the utilization rate has been scaled up to 80% in the last two months.
“MRPL supplies 70% of the feedstock requirement of OMPL and both plants are located very near to each other; therefore, it makes sense to ensure further integration between the two,” Mint reported in December, quoting an ONGC executive. He had said that the sharing of product and raw materials can be enhanced even further after the proposed merger.
Out of the 14 product streams coming from MRPL, the most important is the naphtha stream which OMPL uses to manufacture 900,000 tonnes per annum of paraxylene and 300,000 tonnes per annum of benzene, which are used to manufacture purified terephthalic acid (PTA), dimethyl terephthalate (DMT) and products such as styrene, polystyrene, phenol, nylon, and other derivatives.
These products are extensively used in the manufacture of polyester fibres and PET bottles and several industrial applications such as dyes, resins, pesticides, etc. Other products produced by OMPL are liquefied petroleum gas, fuel gas and hydrogen.
Source: Mint;  09 July 2015
Advertisements

Your View

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s