SECTION 1 EXECUTIVE SUMMARY. EXECUTIVE SUMMARY Configuration Study & DFR For HPCL Mumbai Refinery Expansion

Transcription

1 Ch 1 Page 1 of 20 SECTION 1 EXECUTIVE SUMMARY

2 Ch 1 Page 2 of EXECUTIVE SUMMARY 1.1 INTRODUCTION HPCL s Mumbai Refinery was established in Through progressive revamps/ capacity expansions, current crude oil processing capacity of HPCL- MR is 7.5 MMTPA. It currently has two trains of primary distillation units (CDU- I and II), secondary processing facilities viz. FCCUs, DHDS, MS Block (NHT/ISOM, NHT/CCR and Prime-G), LOBS production facilities and other associated treating and utility facilities. The refinery has recently implemented the DHT project which includes processing facilities such as a new Diesel Hydrotreating Unit, SRU, ARU, SWS and necessary utilities and offsites. With the installed facilities, the refinery shall be able to produce gasoline and Diesel meeting Euro IV quality specifications, besides other petroleum products like LPG, Naphtha, Kerosene, ATF, Fuel oil and Sulphur. HPCL intends to increase the refining capacity of its Mumbai refinery upto 9.5 MMTPA. As a first step to accomplish the target, it is planned to revamp one of its CDU/VDU units i.e. the FRAPS unit. Process Consulting Services (PCS) has prepared a process package to revamp the FRAPS unit (CDU) upto 6 MMTPA capacity. For processing the equivalent quantity of RCO generated from FRAPS, PCS has recommended installing a new VPS unit (VDU) replacing the existing FRVPS and LRVPS units. In order to estimate the capital investment within accuracy of ± 20% and to establish the implementation plan for increase in crude processing capacity with minimum modifications, HPCL has retained EIL s services to prepare detailed feasibility study report for Mumbai refinery. 1.2 SCOPE OF WORK The scope of work under this project is performed in two parts: 1. Configuration Study 2. Detailed Feasibility Report Broad Scope of Work The scope of work shall comprise the following: Development of Base Case LP Model (based on current refinery operation and constraints). Expansion case developed in LP and analyze various residue upgradation technology options.

3 Ch 1 Page 3 of 20 Shortlist options after a broad evaluation of a number of options and subsequent review by HPCL and EIL. Carry out a detailed evaluation of the shortlisted options to arrive at the recommended option. Compilation of the Configuration Study Report. Detailed evaluation of the recommended option and implementation strategy for refinery expansion to be accordingly planned. Identify augmentation in existing process units, utilities, offsite facilities and other infrastructure. Determination of the Capital investment for expansion facilities and carry out techno-economic comparison of alternatives based on CAPEX estimation with +/- 20% accuracy level, OPEX, sales realization, etc. Preparation of refinery layout optimizing the usage of existing land with minimum relocation and satisfying all statutory requirements. Compilation of the Detailed Feasibility report (DFR). 1.3 METHODOLOGY Configuration Study EIL shall develop the LP model for the refinery using in-house information on yield, utilities, catalyst, and chemicals for various process units. PIMS software will be used to develop the LP model. EIL will study various refinery configurations using above LP model and analyze and present results as part of screening study to HPCL. The configurations developed will be discussed with HPCL for mid-term corrections. The short listed options shall be further detailed and capital cost /IRR shall be estimated to come with recommended option Detailed Feasibility Report (DFR) EIL will develop requisite details of various facilities including utilities, offsites and infrastructural facilities and prepare the DFR for the selected configuration to provide +/-20% cost accuracy.

4 Ch 1 Page 4 of BASIC DESIGN PARAMETERS The Basic Design Parameters are summarized below: Refinery Capacity The expansion capacity for study is considered as 9.5 MMTPA. FR : 6MMTPA FRE : 3.5 MMTPA Crude Mix Design Case (for expansion case) 1. Bombay High (3.5 MMTPA) 2. Kuwait (6 MMTPA) On-Stream hours The stream hour considered for the study is 8000hrs/Annum Objectives of the study Capacity Expansion of the refinery from 7.5 MMTPA to 9.5 MMTPA Meeting Euro IV Specs of MS and HSD. Maximisation of Distillate Yields. Maximisation of LOBS production (450KTPA). Improving GRM in post expansion case Product Demand At present the production of LPG, MS and Diesel are not intended to be limited in their production. The product demand considered for the study is as below:

5 Ch 1 Page 5 of 20 PRODUCT Fuel Refinery Liquefied Petroleum Gas Table 1.1: Product Demand Expansion phase ( 000 TPA) Min- Max Hexane Light Aromatic Naphtha (LAN) Heavy Aromatic Naphtha As Produced SOL Euro IV Gasoline Euro IV Diesel MTO To be minimized To be maximized To be maximized SKO ATF Light Diesel Oil (LDO) 0-0 Industrial Fuel Oil (IFO) Low Sulphur Heavy Stock (LSHS) Sulphur Lube Refinery IO Spindle Group - I Spindle Group II N Group I N Group II To be minimized 500 N Group I N Group II Bright Stock Group I Rubber Processing Oil (RPO) - Carbon Black Feed Stock - Asphalt/ Bitumen Feed and Product Prices The Crude Prices are the actual average Crude price of last three years( , , ) and single year price of and the Product Prices are the average Refinery Transfer Price of last three years (i.e ) and single year price of All three years average refinery prices and single year price which will be considered for configuration study are tabulated below:

6 Ch 1 Page 6 of 20 Table 1.2: Feed and Product Prices considered for Configuration study 3 years average price, (without/ with octroi recovery) (Rs/MT) Crude Bombay High / Kuwait 43749/ Arab Mix 44756/ Basra Light 43073/ Arab Extra Light 47722/ Product Prices Liquefied Petroleum Gas Hexane Light Aromatic Naphtha (LAN) Heavy Aromatic Naphtha SOL Euro III Gasoline Euro IV Gasoline MTO SKO ATF Euro III Diesel Euro IV Diesel Light Diesel Oil (LDO) Industrial Fuel Oil (IFO) Low Sulphur Heavy Stock (LSHS) Sulphur 4933 IO Spindle Group - I Spindle Group II N Group I N Group II N Group I N Group II Bright Stock Group I Rubber Processing Oil (RPO) Carbon Black Feed Stock (CBFS) VG VG

7 Ch 1 Page 7 of 20 Utility Prices Raw Water (Rs./m3) / (upto Natural Gas (Rs./MT) purchase of 30KTPA) (beyond purchase of 30 KTPA) Power (Rs/kWH) Product Specifications Product specifications as provided by HPCL in agreed Design basis has been followed in the Study. Primarily MS and diesel shall confirm to Euro-IV quality. 1.5 REFINERY CONFIGURATION STUDY The configuration study involves two parts: 1. Study for Suitability / Adequacy of Existing units for 10 MMTPA crude processing 2. Configuration study considering various options for Residue upgradation unit EIL has developed a comprehensive LP model for build-up of configurations for various options of the integrated expansion refinery. A total of around 200 numbers of refinery configurations are evaluated covering various Residue conversion options using LP PIMS model. The various options for Residue upgradation which were considered to arrive at the most optimum refinery configuration are listed below: Sl. No. Case Description 1. No residue upgradation + MS block 20% revamp 2. No residue upgradation + MS block revamp open 3. SDA (52% lift) + MS block 20% revamp 4. SDA (52% lift) + MS block revamp open 5. SDA (52% lift) + MS block 20% revamp, without VGO Hydrotreating in DHDT 6. SDA (25% lift) + MS block 20% revamp 7. SDA (25% lift) + MS block revamp open 8. SDA (25% lift) + Euro V MS production 9. Visbreaker Unit (with vacuum flasher) + MS block 20% revamp

8 Ch 1 Page 8 of 20 Sl. No. Case Description 10. Visbreaker Unit (without vacuum flasher) + MS block 20% revamp 11. Visbreaker Unit (with vacuum flasher) + MS block revamp open 12. Visbreaker Unit + MS block revamp open, without VGO Hydrotreating in DHDT 13. Visbreaker Unit + MS block 20% revamp + Flue gas PSA for H2 recovery 14. Visbreaker Unit + MS block 20% revamp + Kero Hydrotreating unit 15. SDA (25% lift)+ Visbreaker Unit (with vacuum flasher) + MS block 20% revamp 16. SDA (25% lift)+ Visbreaker Unit (with vacuum flasher) + MS block revamp open 17. Slurry HCU + MS block 20% revamp 18. Slurry HCU + MS block revamp open 19. VBU + MS block 20% revamp + 100% Euro V Diesel production 20. VBU + MS block 20% revamp + ratio of production of Euro IV and Euro V Diesel, same as Euro III and IV in base case 21. VBU + MS block 20% revamp + natural gas purchase = 40.8 KTPA 22. VBU + MS block 20% revamp + natural gas purchase open 23. VBU + MS block 20% revamp + natural gas purchase open, also routed to HGU and CPP 24. VBU + MS block 20% revamp + natural gas purchase open, also routed to HGU and CPP + No internal fuel oil 25. VBU + MS block 20% revamp + 100% Euro V MS production 26. VBU + MS block 20% revamp + ratio of production of Euro IV and Euro V MS, same as Euro III and IV in base case On the basis of detail screening of various refinery configurations, the following options are shortlisted for detailed analysis: 1. Refinery expansion upto 9.5 MMTPA crude processing capacity with Visbreaker unit as an option for residue upgradation 2. Refinery expansion upto 9.5 MMTPA crude processing capacity with Slurry hydrocracker unit as an option for residue upgradation The final configuration is arrived at, after thorough analysis and discussions held during various meetings, which are enumerated below: The design basis was finalized between HPCL and EIL during a meeting held on 13 th March 2013, at EIL HO. The following were finalized with respect to Expansion study: Refinery capacity shall be 10 MMTPA (FR= 6MMTPA, FRE = 4MMTPA) Two cases of design crude mix to be studied:

9 Ch 1 Page 9 of 20 Design Case 1: Kuwait (100%) Design Case 2: Bombay High (20%)+Kuwait (40%)+Arab Light (40%) The new residue upgradation options to be studied were Visbreaker unit, Solvent Deasphalting Unit (SDA) 2 cut and 3 cut, low and high lift SOX limit to be considered for the refinery shall be a maximum of 12.6 TPD. Refinery configuration for base case (for crude thru put of 7.5 MMTPA) was developed in LP using the existing design and operating data. Preliminary runs for expansion case for both design cases were done with SDA as possible residue upgradation option. The base case developed by EIL was analyzed during the meeting held on 15 th April 2013 at EIL HO. Minor modifications based on HPCL comments (such as keeping MS and Diesel production slate for base case in line with present EuroIII/IV Production ratio, were incorporated and the BASE case LP model was frozen. The configuration for expansion study for both design cases were also discussed during this meeting and following key features were decided to be incorporated in the expansion model:- Hydro treating of SRVGO in DHDT and subsequent routing of hydrotreated VGO to Old FCCU. New Kero hydrotreater Unit of capacity = 100m3/hr Revamp of MS block units (NHT/ISOM, NHT/CCR and Prime-G). Adequacy of FRE APS column was carried out and it was found that column is adequate upto 125% on BH crude (over a GFEC design capacity of 3 MMTPA) without prefractionator and subject to the high capacity trays adequacy by respective vendors. Based on the same, it was decided that expansion for Design Case-1 and 2 shall be studied for 9.5 MMTPA and 9.75 MMTPA respectively. For both design case-1 and 2, LP runs were taken considering full capacity utilisation of New FCC and New DHDT with: SDA with variations in DAO yields (25% and 50%) With / without VGO processing in DHDT With / without alkylate Blending for Euro V MS production The results were presented in the first Apex level review meeting held on 3 rd May 2013 at HPCL Mumbai Refinery. The major points of discussion are as follows:- Prices of crude, products, RLNG and alkylate would be revisited by HPCL. Production of 100% Euro V Diesel and MS would be the intent. A check case shall be done considering the ratio of Euro IV and Euro V MS and HSD in expansion case to be maintained same as the.current ratio of Euro III and Euro IV production in base case.

10 Ch 1 Page 10 of 20 Natural gas requirements should be considered in two cases. One as use in boilers and process heaters and other as use in CPP, HGU, boilers and process heaters. VBU+SDA option to be studied as another option of residue upgradation. A high lift SDA and saturation of FCCU capacity are preferred in expansion cases. A meeting was held on 11 th June 2013 at EIL HO, New Delhi in order to review the status of all the action points discussed during the Apex level review meeting. Preliminary discussion on FRE APS/VPS heater adequacy for revamped capacity was also held. The LP runs were carried out for the following Residue upgradation options, limiting revamp of MS Block units upto 20% and subsequently keeping their revamp open (in order to target zero naphtha sales): No residue upgradation case Visbreaker Slurry Hydrocracker This was followed by another interim review by HPCL on July 1-2, 2013 at EIL HO in which results of above cases were discussed. It was finalized to run VBU with vacuum flasher to give improved yields. Also, in order to accommodate the entire Prime-G naphtha into EURO IV MS pool, it was decided that the possibility of reducing its sulphur (upto 50ppmw) would be explored by licensor interaction. Subsequently, for both design case-1 and 2, LP runs were taken incorporating above changes for the four options: No residue upgradation Visbreaker Unit (VBU) SDA (VBU+SDA) These above cases were analysed for keeping MS block revamp upto 20% as well as fully open. Also sensitivity analyses were performed for the configuration to produce various ratios of Euro IV & Euro v products. A detailed presentation was given by EIL on the findings of the configuration study carried out so far during the second Apex Level Review meeting on 19th July 2013 at HPCL Mumbai refinery. The three resid upgradation options that emerged out for further study were Visbreaker Unit (VBU), SDA and (VBU+SDA) option. The following were the key points of discussion: HPCL requested EIL to study a new case : processing SDA pitch as feed to VBU

11 Ch 1 Page 11 of 20 HPCL informed EIL that production of Euro IV HSD and MS is envisaged for post expansion case. Hence all cases should now be run with the objective of producing Euro IV MS and HSD. HPCL informed EIL that the efficiency of some of the existing heaters was being improved. Accordingly, the fuel consumption can be reduced and the same had to be captured in the LP Model also It was followed by an interim meeting with HPCL on 19 th August, 2013 at EIL HO. During this meeting, HPCL informed EIL that the existing DHDT could be operated as a Mild Hydrocracker, as per feedback from UOP. However the option of co processing diesel, in MHCU mode of operation, would not be possible. Since the quantity of middle distillates produced in the expansion scenario required operation of DHDT also after saturating the DHDS, thus the possibility of converting the DHDT into a mild hydrocracker was ruled out. The PCS FR process package was shared by HPCL.EIL estimated the capital investment for the revamp of FR APS and New FR VPS based on inputs. The cost sheets were submitted to HPCL for review on 5 th September Based on the feedback obtained in the previous Apex level meeting, SDA pitch was routed to Visbreaker. However, the same was limited to 15% of the total VBU feed. Also, revised crude and product pricing (as furnished by HPCL on 26 th August, 2013) was fed in the LP Model. The revised findings were analyzed for all the residue upgradation options of both the design cases. The results for the following cases were presented in the third Apex level review meeting held on 31 st October,2013 at HPCL Mumbai refinery: Visbreaker Unit (VBU), Low lift SDA unit VBU+Low Lift SDA Slurry Hydrocracker VBU and Slurry HCU options were finalized for the configuration study. Based on the selected residue upgradation option, the Draft Configuration Study report was submitted by EIL on 2 nd December, Additional units considered for Configuration study of the Refinery Expansion case: HPCL intended to install a swing unit for producing isobutylene and propylene from cracked LPG of both the FCCUs. EIL, thus, worked out their potential in the refinery. The recovery that can be achieved for isobutylene produced from the swing unit is around 45%.Due to low recovery, production of isobutylene was ruled out by HPCL and EIL. EIL also reported the improvement in refinery margin based on the price of propylene furnished by HPCL.The same shall be elaborated in section 7.1 of DFR.

12 Ch 1 Page 12 of 20 As per original scope of the job, the option of manufacturing Mixed Xylenes was to be studied.however it was later ruled out as Aromatics and RON cannot be maintained in Reformate to be blended in MS Euro IV Pool after producing Mixed Xylene. Post submission of the Configuration Study report, there were meetings held in EIL HO on 28 th March and 24 th April, 2014 with HPCL. It was decided that the refinery expansion shall include the revamp of FRAPS upto 6 MMTPA and implementation of a new VDU (as per the PCS process package) and a new Visbreaker Unit (for residue up gradation). As indicated by M/S PCS, FRAPS shall be revamped upto 6 MMTPA and a new single VPS column will be set up instead of two existing VDUs-FRVPS and LRVPS. Based on the above, the Draft DFR was submitted to HPCL on 11 th July, DETAILED FEASIBILITY REPORT Description of selected case On basis of detail economic screening of the shortlisted refinery configuration options, the following option is selected for detailed analysis. Refinery expansion capacity : 9.5 MMTPA Crude mix considered for Expansion case: Bombay High (3.5 MMTPA); Kuwait (6 MMTPA) Additional Key Considerations: The following updations in LP Model were done on the basis of the existing refinery operating feedback: The CCR yields and reformate properties (RON, aromatics vol%) were revised. The RON of reformate from CCR was reduced to 100 from 103. The yield of hydrogen from CCR was decreased. The refinery CPP has a power generation capacity of 49 MW. The existing power production in the refinery was limited to 13 MW max and balance power was imported from the grid. The fuel oil firing rate per ton of steam production in the Utility boilers and the naphtha firing rate per MW of power production in the gas turbines were updated.

13 Ch 1 Page 13 of 20 The hydrogen consumption in MSDW/RHDT was increased to 12 TPD. A mechanical loss of 1.44 TPD in DHDT H2 consumption, for design capacity, was also incorporated. In addition to the above, the Base Case was revised for the same crude mix (4 MMTPA Kuwait, 3.5 MMTPA BH) as considered for the Expansion case. The final refinery expansion configuration is: Case Expansion case (9.5 MMTPA) Description Revamp of FRAPS to 6 MMTPA crude processing capacity as per BEDP prepared by PCS. A new VPS unit for the revamped FRAPS Revamp of MS block units (NHT/ISOM, NHT/CCR and Prime-G) by 20% A new Hydrogen generation unit of capacity 36 KTPA Modifications in DHDT to hydrotreat VGO A new Visbreaker unit of capacity 565 KTPA for residue upgradation. This case has the following features: 1. Feed Stock price per MMTPA for Base case is Rs 4568 Cr/Annum where as the same for Expansion case is Rs 4527Cr/Annum due to increase in low cost Kuwait Crude proceesing from 4MMTPA to 6 MMTPA.This results into decrease in feed stock price which ultimately leads to Higher GRM. 2. LPG produced in the Expansion case is high owing to increase in crude processing capacity and higher FCC thru'put (in expansion case). 3. LAN in expansion case is lower than that in Base Case due to revamp in MS block units (NHT/ISOM and NHT/CCR) by 20%. 4. Prorating the crude processing capacity, the MS produced in expansion case should increase by (9.5/7.5)*100= 127%. However, MS produced in this case is even more than that due to higher FCC thru'put. 5. The production of diesel improves in Expansion Case owing to increase in refinery crude thru put, higher FCCU capacity and operation of a new VBU. 6. Prorating the crude processing capacity, fuel oil in expansion case should increase by (9.5/7.5)*100= 127%. FO produced in this case is even more than that due to higher yield of Vacuum residue (VR) in expansion Case..VR

14 Ch 1 Page 14 of 20 in expansion case =1944 KTPA (20.5 wt%) wheras the same in Base Case is 1289 KTPA (17.1wt%) Material balance LP runs for the selected case has been done for design crude mix meeting all product specifications as mentioned in design basis. The material balance and unit capacities considered for IRR estimation are presented below in the Tables-1.3 and 1.4 respectively. Table 1.3: Overall Material Balance of Refinery Stream Base Case Expansion Case % Increase FEED (000 TPA) Bombay High Kuwait Natural gas PRODUCT (000 TPA) LPG LAN SCN Treated Hexane Solvent MS Euro III MS Euro IV Total MS MTO ATF SKO Euro III Diesel Euro IV Diesel Total diesel LDO RPO FO 180 cst Sulphur N Gr-I N Gr-I Spindle Oil Gr-I Spindle Oil Gr-II N Gr-II N Gr-II 7 92 Bright Stock 61 50

15 Ch 1 Page 15 of 20 Stream Base Case Expansion Case % Increase IO Total LOBS VG-10 Bitumen VG-30 Bitumen Total bitumen PROJECT DESCRIPTION The capacity of HPCL Mumbai refinery is increased from 7.5 MMTPA to 9.5 MMTPA. The desired capacity increase is proposed to be achieved by implementation of the expansion project as below: Revamp of FRAPS upto 6 MMTPA crude thru put Post expansion, the existing FRVPS and LRVPS units shall be dismantled. A new VPS unit (VDU) shall be installed for processing the RCO generated from FRAPS (based on the PCS process package). A revamp of 20% shall be done in the MS block units (NHT/ISOM, NHT/CCR and Prime-G) in order to accommodate the increased light distillates. Modifications in DHDT for Hydrotreating VGO A new HGU unit, in order to meet the peak requirement of hydrogen during VGO Hydrotreating in DHDT. A new Visbreaker unit, as an option of residue upgradation Process Units The extent of augmentation in the process units is tabulated below: Units FRAPS Table 1.4: Unit capacities in Expansion Design Capacity (KTPA) 4260(Bas/Kuw) 4400 (AL/AM) Post Revamp Capacity (KTPA) New VPS % Increase in Capacity FREAPS 3570 (BH) /VPS 3710 (AXL) NAPHTHA SPLITTER UNIT NHT/ ISOM NHT/CCR PRIME G NEW FCCU

16 Ch 1 Page 16 of 20 Units Design Capacity (KTPA) Post Revamp Capacity (KTPA) % Increase in Capacity OLD FCCU DHDS DHDT VGO FEED POOL (DHDT) DIESEL FEED POOL (DHDT) PDA HGU New HGU VBU Note: New units are indicated in bold New Utility Systems The revised utility consumption, required post revamp of the above facilities, has been worked out based on estimation of utility consumption of the process units. Following New utility Systems shall come up in Post expansion case. Table 1.5 New Utility Systems Utility system Description Bearing Cooling Water Cells Bearing Cooling Water Pumps Bearing Cooling water system 1(W) Cells each of 150 m3/hr Capacity. 1W+1S pumps each of 150m3/hr. Balance all utility systems are adequate in order to cater the additional requirement post expansion. The details are given in Section 7.5 of DFR New Offsite Facilities The existing storage and transfer facilities of the refinery (for the various feed and product streams) commensurate with the additional quantities to be handled for the Expansion Project. Thus, in this project no new additional crude and product tanks shall be considered. Intermediate tanks viz Raw Diesel Storage Tanks, HGU Feed Tanks, VBU Feed Tanks, VGO Feed Tanks, Hydrotreated VGO tanks, Diesel back

17 Ch 1 Page 17 of 20 blending stream tank, Slop/off spec tanks are coming up in Expansion Case. The details are given in Section 7.6 of the DFR. Following New Tanks shall come up in Post expansion case. S.No Service Table 1.6 List of New Tanks No of Tanks Type HxD(mxm) 1 Raw Diesel Storage Tanks 2 Floating Roof 20x30 2 HGU Feed Tanks 2 Floating Roof 20x9 3 VBU Feed Tanks 2 Fixed Roof 20x16 4 VGO Feed Tanks 2 Cone Roof with N 2 blanketing 20x25 5 Hydro treated Cone Roof with N 2 2 VGO blanketing 20x23 Diesel back 6 blending stream 2 Floating Roof 20x13 tank 7 Slop/Offspec tanks 1/2 Floating Roof 20x20/20x13 The new offsite tanks shall also be associated with new offsite pumps respectively. 1.8 ECONOMIC EVALUATION FOR SELECTED EXPANSION CASE The financial results for the expansion case (based on 3 Years average prices, with octroi recovery) is worked out & tabulated below: Table 1.7 Financial evaluations S.NO Description Total Cost (Rs. Crs) 1 Capex Opex Sales IRR on Total Capital Pre-tax, % 24.03% Post-tax, % 20.60% IRR on Equity Pre-tax, % 50.85% Post-tax, % 43.46% Sensitivity Analysis Sensitivity analysis has been carried out to check the impact on Internal Rate of Return considering change in Capex, Opex & Sales. The IRR for all these cases has been tabulated below based on following two scenarios:

18 Ch 1 Page 18 of Equity concurrent to Debt Table 1.8: Sensitivity analysis for Equity concurrent to Debt scenario Total Capital Equity S.No Description Pre-Tax Post-Tax Pre-Tax Post-Tax Base Case 24.03% 20.60% 50.85% 43.46% 1 Capex: +10% 21.99% 18.92% 44.83% 38.17% Capex: -10% 26.48% 22.62% 58.24% 49.93% 2 Opex: +10% -ve -ve -ve -ve Opex: +5% 12.15% 10.69% 17.27% 13.61% 3 Sales: -10% -ve -ve -ve -ve Sales: -5% 10.67% 9.39% 13.00% 9.67% 2. Debt after Equity Table 1.9: Sensitivity analysis for Debt after Equity scenario Total Capital Equity S.No Description Pre-Tax Post-Tax Pre-Tax Post-Tax Base Case 24.04% 20.54% 39.89% 34.47% 1 Capex: +10% 22.00% 18.86% 36.00% 30.97% Capex: -10% 26.49% 22.55% 44.44% 38.56% 2 Opex: +10% -ve -ve -ve -ve Opex: +5% 12.16% 10.65% 15.89% 12.73% 3 Sales: -10% -ve -ve -ve -ve Sales: -5% 10.68% 9.35% 12.46% 9.48% Above table indicates that Project IRR is more senstive to variation in Opex & Product prices as compared to variation in Capex.

19 Ch 1 Page 19 of IMPLEMENTATION STRATEGY To achieve the expansion refinery thru put of 9.5 MMTPA, the implementation of the expansion project shall include the following: Revamp of FRAPS upto a crude thru put of 6 MMTPA as per the BEDP prepared by M/S PCS. Installing a new VPS unit (VDU) for processing equivalent quantity of RCO generated from FRAPS. Dismantling the existing FRVPS and LRVPS units. The increase in distillate yields due to increase in crude thru put upto 9.5 MMTPA shall be accommodated in the existing refinery configuration. However, a revamp of 20% is considered in NHT/ISOM, NHT/CCR and Prime-G respectively for necessary enhancement of gasoline make. Modifications in DHDT unit to ensure hydrotreating of Vacuum gas oil (VGO). The hydrotreated VGO shall be routed to Old FCCU as feed. Installing a new Hydrogen generation unit of capacity 36 KTPA in order to meet the peak requirement of hydrogen during operation of DHDT in VGO mode. A new Visbreaker unit, as an option of residue upgradation: This would improve high sulfur and heavier crude processing capability and also improve distillate yield for value addition by reduction of cutter in fuel oil pool. Necessary Utilities and Offsite tankages 1.10 ENVIRONMENTAL EMISSIONS The stipulated SOX emission limit is 12.6 TPD for HPCL Mumbai Refinery. For the enhanced capacity of 9.5 MMTPA, SOX emissions are estimated to remain within the maximum limits. This is possible as a result of various measures taken-up during the configuration study of the project, such as improved furnace efficiency, use of only low sulphur fuel oil in furnaces and also due to two Sulphur recovery units (DHDS and DHDT) which are modeled to track H2S produced from various process units with a sulphur recovery of 99.9 % in DHDS SRU and 99.8% in DHDT SRU.

20 Ch 1 Page 20 of RECOMMENDATION The HPCL Mumbai Refinery capacity can be increased from 7.5 MMTPA to 9.5 MMTPA considering modifications as enumerated in the report. The desired capacity increase is proposed to be achieved by the revamp of one of its CDUs (FRAPS), installing a new VPS unit, minor revamp in MS Block units, and modifications in utilities and offsites. The option of VBU in the expansion case gives a fairly high yield of middle distillates. It is a proven technology and requires no auxiliary units (such as HGU, etc). The space requirement is low and it needs relatively low Capital investment. The total estimated capital cost for the Expansion case is Rs crores. The cost estimates has an accuracy of ± 20% and the validity of the above cost is as of 4 th Qtr. of Post tax IRR on total capital for the expansion is 20.60% (based on 3 year average price, with octroi recovery). It is concluded that investments made can be suitably justified by increase of product pool (MS and Diesel) and commensurate shrinkage of naphtha as well as reduction of cutter to Fuel oil pool.