Bharat Petroleum Corp. (BPCL) plans to invest $11 billion in a new refinery and petrochemical project in southern Andhra Pradesh to meet the rising fuel demand in India, the world’s fastest-growing major economy, according to the several media reports. As part of India’s strategy to become a global refining hub, BPCL aims to capitalize on the shift as Western companies reduce crude processing capacities in favor of energy transition initiatives. With an ambitious goal to transform into a developed nation by 2047, India’s GDP is projected to rise to $30 trillion from its current $3.8 trillion.

BPCL has already begun preliminary work on the project, including land acquisition, for the construction of a refinery and ethylene cracker with an annual capacity of at least 9 million metric tons. The project, which is expected to have 35% petrochemical intensity, could cost between Rs 90,000 crore and Rs 95,000 crore ($10.56 billion-$11.14 billion). The company currently operates three refineries in India with a combined capacity of 35.3 million metric tons per year and sources fuel from the 3 million metric ton per year Numaligarh refinery in the northeast, as reported by several news agencies.

Around 80% of the output from the proposed Andhra Pradesh refinery will be sold in southern India, which is home to significant petrochemical developers and automobile manufacturers. BPCL is increasing its focus on petrochemical production in response to the nation’s growing per capita consumption, driven by rising manufacturing activity. The company is also exploring the possibility of setting up a refinery in partnership with state-run Oil and Natural Gas Corp. in Uttar Pradesh, while advancing its clean energy goals.

This expansion will also help BPCL reduce its reliance on fuel purchases from other companies. Currently, it buys one-fifth of the 50 million metric tons of refined fuels it sells through its retail stations. BPCL is also committed to aggressively bidding for renewable energy projects tendered by the government and may acquire companies to meet its target of 10 gigawatts of clean energy projects by 2035. It has already formed a joint venture with Sembcorp to expand its renewable energy portfolio by 300 megawatts.

Additionally, BPCL is involved in the $20 billion Mozambique liquefied natural gas (LNG) project, led by France’s TotalEnergies, holding a 30% stake alongside other Indian companies. BPCL expects operations at the Mozambique project to begin in the first quarter of 2025, with gas monetization expected by 2028-29.