FEASIBILITY REPORT FOR RESIDUE UPGRADATION PROJECT AT MUMBAI REFINERY UNDER MREP PHASE II HINDUSTAN PETROLEUM CORPORATION LIMITED, MUMBAI REFINERY

FEASIBILITY REPORT FOR RESIDUE UPGRADATION PROJECT AT MUMBAI REFINERY UNDER MREP PHASE II HINDUSTAN PETROLEUM CORPORATION LIMITED, MUMBAI REFINERY

Page 2of 11 1.0 INTRODUCTION HPCL s Mumbai Refinery was established in 1954. 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 (FR APS/VPS and FRE APS/VPS, associated secondary processing facilities viz. Old & New FCCUs, DHDS & DHDT, MS Block (NHT/ISOM, NHT/CCR and Prime-G+), LOBS production facilities and other associated treating & utility facilities. The refinery has also revamped its DHDS unit through Isotherming technology licensed by DuPont to produce ultra-low sulfur Diesel. 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& Sulphur. In view of the expected growth in demand for petroleum products, to meet the BS VI Auto Fuel Specifications for MS & HSD and to remain competitive in the market with product self-sufficiency, HPCL has planned to undertake the Mumbai Refinery Expansion Project (MREP) in two phases (Phase I and II) primarily to meet the following overall objectives: Maximization of crude refining capacity (from existing 7.5 MMTPA to 9.5 MMTPA) for optimum capacity utilization of secondary processing facilities existing at Mumbai Refinery. Meeting BS V/VI specifications for MS and HSD. Improvement in GRM by maximization of distillate yields using Hydrogen Based Bottoms Upgradation facilities. Zero Fuel Oil and zero Export Naphtha production. Mumbai Refinery has already undertaken implementation of Phase I of the project after obtaining Environmental Clearance, and the following facilities are expected to be installed post Phase I: 1. MR capacity expansion (FR crude unit revamp) from existing 7.5 MMTPA to 9.5 MMTPA 2. Revamp of MS block and DHDT units to produce BS-VI MS and HSD NHT/ISOM revamp by 30% NHT/CCR revamp by 35 % Prime G+ revamp by 30%

Page 3of 11 Revamp of DHDT for VGO and diesel co-processing mode 3. MR II tankage facilities at Calico land for construction of a new tank farm 4. New HGU of capacity 65 KTPA For Phase II, HPCL intends to carry out Detailed Feasibility Report (DFR) for Hydrogen Based Residue Up-gradation project primarily to meet the following objectives: To improve refinery profitability (GRM) by maximizing distillate yields using Hydrogen Based Bottoms Upgradation facilities. To saturate the existing secondary processing units, mainly FCCUs and DHDS/DHT units, as also for targeting zero fuel oil and zero export naphtha production HPCL has entrusted EIL to carry out the job of preparation of detailed feasibility report (DFR) for Phase II expansion of Mumbai Refinery Expansion Project (MREP), which includes: Configuration study for a refinery throughput of 9.5 MMTPA with a new hydrogen based residue up-gradation facility Matching treating and utility & offsite (U&O) facilities for the selected crude mix. Base Case for Phase II Refinery Configuration study will be the refinery configuration established under Phase I DFR. In order to estimate the capital investment within accuracy of ± 20% and to establish the implementation plan for Phase II Residue upgradation project, refinery configuration study & preparation of DFR are performed based on inhouse process knowledge, state-of the art tools and years of expertise with EIL. 2.0 DETAILED FEASIBILITY REPORT Base case The Base case was developed by LP modeling, considering the following: Crude Mix: Crude thru put of 9.5 MMTPA is considered with the following crude mix: Bombay High: Arab Light: Basrah Crude: 3.5 MMTPA 2 MMTPA 4 MMTPA

Page 4of 11 (FR=4MMTPA Basrah + 2 MMTPA AL; FRE=3.5 MMTPA BH) Feed/ product prices: Three years average price taken from 2015-2018 Key considerations: 1. Revamp of FRAPS unit upto crude processing capacity of 6 MMTPA and a new VPS unit (VDU) has been installed for processing the RCO generated from revamped FRAPS. 2. Revamp of MS block units (NHT/CCR by 35%, NHT/ISOM by 30% and Prime G+ by 30%) is completed. 3. Revamp of DHDT for co-processing of diesel and VGO and subsequent routing of hydrotreated VGO to Old FCCU is completed. 4. A new HGU, for supplying hydrogen to refinery is installed. 5. SOX limit for the refinery shall be a maximum of 12.6 TPD. 6. CPP revamp has not been considered under this DFR. 7. Minor modification, if required, may be undertaken in GFEC SWS and DHT ARU to process the increased sour water and rich amine generated post Phase I expansion. Phase II Expansion case The final Phase II expansion case was developed by LP modelling, considering the following: Crude Mix: Design Crude Mix 1 Bombay High: Arab Light: Kuwait Crude: 3.5 MMTPA 2 MMTPA 4 MMTPA (FR=4MMTPA Kuwait + 2 MMTPA AL; FRE=3.5 MMTPA BH) Design Crude Mix 2 Bombay High: Kuwait Crude: 3.5 MMTPA 6 MMTPA (FR=6MMTPA Kuwait; FRE=3.5 MMTPA BH)

Page 5of 11 Design Crude Mix 3 Bombay High: Basrah Crude: 3.5 MMTPA 6 MMTPA (FR=6MMTPA Basrah; FRE=3.5 MMTPA BH) Feed/ product prices: Three years average price taken from 2015-2018 Objectives: Residue Up-gradation. Maximization of distillates. Zero Fuel Oil and zero Export Naphtha production. Material balance Out of all the LP cases developed, only one have been shortlisted based on the preliminary economic analysis and other factors such as plot requirement, reliability, proven track record etc. The shortlisted case is as follows: Crude mix: 6 MMTPA Basrah + 3.5 MMTPA Bombay High, with RUF- Ebullated bed technology. Basrah crude was selected over Kuwait crude due to its ease of availability and low purchase cost giving a higher GRM. Basrah crude was selected over Arab Light as the VR yield of Basrah is higher and thus maximizing the Residue upgradation capacity. Elaborate explanation on selection of Ebullated bed technology over the others residue upgradation technologies is provided in the DFR. Material balance for the base case and Phase II shortlisted case are provided in the table below. Overall Material Balance of Refinery Stream Base Case (LP Case no.141) Expansion Case (LP Case no.244) FEED (000 TPA) Bombay High 3500 3500 Basrah 4000 6000 Arab Light 2000 - Total crude 9500 9500

Page 6of 11 Natural Gas 24 24 Additive - 1.3 Import VR - 606 Total feed 9524 10131 PRODUCT(000 TPA) LPG 535 638 LAN 103 - SCN 96 96 Treated Hexane 30 30 Solvent1425 8.5 8.5 MS BS VI 1731 1830 Total MS 1731 1830 MTO 48 48 ATF 600 600 SKO 52.2 52.2 Diesel BS VI 3406 4614 Total Diesel 3406 4614 LDO - - RPO - - FO180cst 1015 - FO Bunker - - Total Fuel oil 1015 - Sulphur 63 189 150 N Gr-I 70 70 500 N Gr-I 100 100 Spindle Oil Gr-I 15 15 Spindle Oil Gr-II 32 32 150 N Gr-II 76 76 500 N Gr-II 92 92 Bright Stock 50 50 IO-100 15 15 Total LOBS 450 450 VG-10 Bitumen 234 - VG-30 Bitumen 546 252 VG-40 Bitumen - 377 Total Bitumen 780 629 Slurry Pitch - 127 Fuel& Loss 606 820 Total 9524 10131

Page 7of 11 3.0 PROCESS UNITS The design capacities of new process units envisaged under MREP Phase II is provided in the table below: Design Capacities of new Process Units A. New Processing Unit Capacity 1 RESIDUE UPGRADATION FACILITY (RUF) MMTPA 1.81 B. New Auxiliary Units 1 HYDROGEN GENERATION UNIT (HGU) KTPA 65 2 SOUR WATER STRIPPERUNIT (SWS) TPH 66 3 AMINE REGENERATION UNIT (ARU) TPH 310 SULPHUR RECOVERY UNIT (SRU) WITH TAIL GAS TPD 2X 180 4 TREATING UNIT (TGTU) 4.0 NEW UTILITY SYSTEMS The utility facilities for the Refinery consist of the following: Cooling water system DM water system Compressed air system Nitrogen system Steam, power and BFW system Condensate system Internal fuel oil and fuel gas system Bearing Cooling Water System. Flare system. The existing utility systems will be completely saturated post Phase I expansion of the refinery. Hence, to meet the Phase II utility demand, new utility systems have been configured. The utility requirement for the Phase II various units and utility & offsite have been referred from EIL in house data. Based on this the Utility block configuration have been worked out. Present DFR costing have been carried out considering this utility block configuration. However, utility summary and the utility block configuration shall be finalized at design stage after finalization of licensors of new process units. Following New Utility Systems shall come up in MREP Phase-II expansion:

Page 8of 11 New Utility Systems NEW UTILITY SYSTEM DETAILS OF FACILITIES Bearing Cooling Water System Bearing Cooling Tower Cells 2 number of cells(1 working+1 standby), each having a capacity of 700 m3/hr., Type: Induced draft Number: 2 (1 working + 1 standby) Bearing cooling water circulation pumps Side stream filters Capacity: 700 m3/hr. per pump Head: 60 m Type: Horizontal centrifugal Drive: Electric motor 2 number, each of capacity 14 m3/hr. Compressed Air System (Plant and Instrument Air) LP air Compressor HP air Compressor Number: 2 (1 working + 1 standby) Capacity: 20000 Nm3/hr. each Type: Centrifugal, non-lubricated Drive: Electric motor Number 1 (1 working + 0 standby) Capacity: 250 Nm3/hr. each Type: Reciprocating Drive: Electric Motor Instrument air Dryer Number: 2 (1 working + 1 standby) Capacity: 10000 Nm3/hr. Type: No loss purge, split flow, closed circuit, heat of compression type) Dual bed absorption with activated alumina as desiccant Nitrogen System-taken care in Phase I N2 plant Steam and Power system Utility Boiler Number: 1 (1 standby) Capacity: 125 TPH of gross HP steam (i.e. 100 TPH of net HP steam) generation at 40 kg/cm2g Steam Turbine Generator Number: 1 Rating: 10 MW power generation Type: Extraction Sea cooling water system Sea cooling tower Number: 3 (2 working + 1 standby) Capacity: 4000 m3/hr. each Sea cooling water recirculation pump Number = 2 working + 1 standby Capacity: 4000 m3/hr. each Pump Head: 60 m

Page 9of 11 NEW UTILITY SYSTEM DETAILS OF FACILITIES Side stream filter Number: 2 Capacity: 80 m3/hr. each DM water chain DM water system Number: 2 (1 working + 1 standby) Capacity: 220 TPH each Raw water system Raw water sump Dimension: 25m X 25m X 5m: Raw water pump to DM feed Raw water pump to BCT Raw water pump as service water HC flare Sour flare Number- (2working +1 standby) Capacity:100m3/hr.each Number- (1 working + 1 standby) Capacity: 40 m3/hr each Number- (1 working + 1 standby) Capacity: 50 m3/hr each Flare system Flare stack: Dia: 72", Height: 110 m, MOC: KCS + 3mm CA+PWHT Flare KOD: Dia: 6 m, TL/TL-27 m, MOC: KCS + 3mm CA + PWHT Water seal drum: Dia: 5.5 m, TL/TL: 9 m, MOC: KCS with cement lining internals: SS316L. Flare tip: Dia: 72 ", MOC: Incoloy 825. Flare stack: Dia: 20", Height: 110 m, MOC: KCS + 3mm CA+PWHT Flare KOD: Dia: 2 m, TL/TL-6 m, MOC: KCS + 3mm CA + PWHT+HIC Flare tip: Dia: 20 ", MOC: Incoloy 625. 5.0 NEW OFFSITE FACILITIES The offsite facilities shall be augmented by adding following new storage facilities under MREP Phase-II. Sl. No. Service Gross Capacity per Tank, M3 List of new offsite tanks Height/ Length, m Diameter, m No of Tanks Type 1 LPG 2080 50.0 7.00 3.0 Mounded Bullet 2 HGU feed 5034 15.0 21.00 1.0 External Floating Roof

Page 10of 11 3 VR 14605 20.0 30.50 3.0 Cone roof Apart from these tanks, 4 Naphtha tanks will be reassigned / realigned to cater to the space requirement of this project. In addition to the above, the following are the new offsite pumps envisaged in MREP Phase II: List of new offsite pumps Sl. No. Service Each Pump flow (m3/hr) Head (m) No. of pumps Type 1 VR pump from MR-II area to RUF* 182 119 1+1 Screw Pump 2 VR pump from VPS to MR-II area# 235 60 1+1 Screw Pump 3 HCGO pump from MR-II area to RUF* 35 95 1+1 Centrifugal 4 HCGO pump from NFCC to MR-II/RUF area* 45.0 57 1+1 Centrifugal 5 ASPHALT pump from MR-II area to RUF* 40.0 113 1+1 Screw Pump 6 HGU feed pump* 57 89 1+1 Centrifugal 7 VR pump from FRE-VPS to RUF/MR-II# 43 75 1+1 Screw Pump Note: All pumps are motor driven, MOC: CS. * New pumps # Existing pumps. Adequacy to be checked during detail engineering. For DFR costing, cost of news pumps have been considered. 6.0 ENVIRONMENTAL EMISSIONS The stipulated SOx emission limit is 12.6 TPD for. For the enhanced capacity of 9.5MMTPA and with Residue Upgradation Facility, 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 (Sulphur content 0.5 wt.%) in furnaces and also due to high Sulphur recovery in the existing two SRUs and new SRU envisaged under this project. Also, low NOx burners will be installed to reduce NOx emission from all furnaces. The estimated SOx emission from the refinery post Phase II expansion is within the stipulated limit.

Page 11of 11 7.0 RECOMMENDATION Based on the detailed feasibility study it is recommended to consider a Hydrogen based Residue Upgradation Facility as part of MREP Phase II Project. The Phase II project includes the new facilities as follows: Residue Upgradation Unit Ebullated bed Hydrocracking Technology. Hydrogen Generation Unit Sulfur Block Matching Treating Units Matching Utility and Offsite facilities. The total estimated capital cost for the Phase II Expansion case is 6963 crores.