Bina refinery was commissioned in January 2011 at an investment of Rs 12,500 crore and is currently working at 100 per cent refining capacity of six million tonnes per annum. The company imports crude oil from the Gulf countries which is brought in Very Large Crude Carriers (VLCC), and pumped ashore by the ship’s pumps through a Single Point Mooring (SPM) and sub-sea pipeline to its COT off the village of Vadinar. Currently crude oil is stored in eight tanks each of 60,000 cubic meter capacity at the COT from where it is pumped across to Bina, through the cross-country 935-km pipeline.

The company has proposed to added eight additional storage tanks of 60,000 cubic meter capacity to overcome future storage difficulties. Besides this BORL also plans to to include other ancillary facilities such as a blending plant and an interconnection to the neighbouring Indian Oil Corporation (IOC) Terminal. Crudes require to be blended for refinery production, but due to limitation of space at the Bina Refinery the company has now decided to have the blending unit at the Vadinar COT spread over 167 hectare land.

“The capacity addition at the Vadinar COT is part of our overall expansion plan which includes 25 per cent increase in refining capacity at the Bina refinery,” said chief operating officer, BORL, R Ramachandran. With expansion the refinery would require continuos supply of crude and hence it has been proposed to increase COT capacity, he added.

Ramachandran said that the project is still in initial stage is yet to get all the necessary clearances. BORL plans to increase it refining capacity from current 6 million tonnes to somewhere between 8-9 milllion tonnes. “Once the expansion work commences it will take us nearly three years to complete it. We hope to begin the expansion work this fiscal,” Ramachandran added.

Explaining the problem related to storage capacity the company said in its Environment Impact Assessment (EIA) report submitted to Gujarat government, that the full load of a VLCC occupies as many as six tanks, and when there is a mismatch in successive arrivals, the vessel has to wait at the Anchorage until there are sufficient empty tanks to receive the cargo. This involves demurrages, which BORL proposes to offset by constructing additional tanks.

The addition of eight additional tanks has been proposed for greater flexibility of operation, by way of allowing different grades of crude in successive shipments and also the ability to blend crudes as may be required by the refinery at Bina. Addition of eight new tanks could cater to a much higher throughput in the future, if the refinery at Bina were to increase its capacity to 15 or even 30 million tonnes per annum.

Another important reason to increase COT capacity is to save on demurrage. According to the company the demurrage rates of VLCC tankers are of the order of US $ 65,000 per day which fluctuates depending on the nature of the shipping market.

If vessels arrives at 15 day intervals, the system works uninterrupted.

However, a mismatch of five days in ship arrivals would find a waiting time of five days for a Super Tanker, causing a demurrage of US $ 325,000.

Assuming two such occurrences a year, the demurrage charges would be US $ 650,000 per year on the basis of the present throughput of 6 million tonnes per annum.

And, if the successive tankers bring in different qualities of crude, the requirement of segregation involves a vessel waiting for 15 days, giving a demurrage of US $ 975,000 per occurrence.

Hence, company hopes to save big on demurrage after construction of the additional eight storage tanks.

A public hearing for environment clearance on this expansion plan of BORL is scheduled on July 16 by the Gujarat Pollution Control Board (GPCB).