BPCL Expects Andhra Pradesh Refinery Approvals by February 2027

State-run Bharat Petroleum Corporation (BPCL) announced that it expects all necessary approvals, including clearance from the Oil Ministry and the Union Cabinet, for its proposed refinery-cum-petrochemicals complex in Andhra Pradesh to be completed by February 2027.

The public sector oil marketing company plans to establish a 10 million tonnes per annum (mtpa) refinery featuring high petrochemicals intensity. The initial plan was for a 9 mtpa refinery combining petroleum products and petrochemicals.

BPCL Director (Finance) VRK Gupta stated during a post-result analyst call that the company's board has approved setting up a wholly-owned subsidiary for the project. The proposal has been forwarded to the Ministry of Petroleum and Natural Gas (MoPNG) for recommendation and subsequent incorporation.

The detailed feasibility report is in its final stages, with financial numbers currently undergoing review. BPCL aims to conclude the numbers and approach the board for a final investment decision within the next two to three weeks.

The project configuration is set at 10 mtpa of refining capacity with a petrochemical intensity of approximately 32 to 33 percent. The investment will be executed through a subsidiary company, making it subject to financial closure along with approvals from the Oil Ministry and the Cabinet Committee on Economic Affairs.

BPCL anticipates that CCEA approval will take another two to three months following board approval. Pre-project activities, license selection, and parallel processes are currently underway, with full approvals expected within three to four months.

Regarding land procurement, approximately 4,700 acres have been registered in BPCL's name, which the company considers sufficient for initial work. An additional 1,400 acres designated for green belt development is expected to be acquired by November 2026, fulfilling the total 6,000-acre requirement outlined by the Andhra Pradesh government.

The financing structure for the project is planned at a 70:30 or 65:35 debt-equity level. BPCL is exploring at least a 30 percent equity dilution during the project's progress to bring in partners once terms are finalized.

Separately, the Mozambique liquefied natural gas project continues to progress, reaching 47 percent completion as of September 2026. Gas production is expected to commence by mid-2028, around June or July.

BPCL subsidiary Bharat PetroResources, through its Netherlands-based step-down subsidiary BPRL Ventures Mozambique, holds a 10 percent participating interest in the LNG project. Along with ONGC Videsh and Oil India, the consortium holds a total 30 percent stake in the project led by TotalEnergies.

The first phase development is structured for 13 million tonnes across two trains, yielding a 1.3 million tonne share for BPCL. The company has tied up a Sales and Purchase Agreement for 1 million tonnes of gas and has initiated marketing efforts for the volume.

"Large-scale infrastructure and energy projects require meticulous planning, structured debt-equity configurations, and phased regulatory clearances. BPCL's approach of creating a wholly owned subsidiary and targeting strategic equity dilution demonstrates a disciplined financial strategy. Securing land and finalizing feasibility metrics early on will be critical for mitigating execution risks as the project moves toward its final investment decision and targeted approvals by 2027." — Dr. Shishir Gupta, Founder & CEO, StartupLanes