Coal news and updates

MRPL defers commissioning of pet coke refinery to Jan 2014

December 12: Mangalore Refineries and Petrochemicals Ltd (MRPL), a subsidiary of ONGC Ltd, has extended the commissioning date of its 1-million tons per annum (mtpa) pet coke facility at its plant in Mangalore, Karnataka, to January 2014, an industry source said.

The company had earlier said commissioning of the plant will take place in December 2013.

"The pet coke facility will now be commissioned in January – though no reason was provided by MRPL," the source added.

Commissioning of this facility is likely to change the domestic pet coke market scenario to some extent as it may lead to a slight fall in the use of the imported material, said an official from a cement company.

The official also feels that, despite additional capacity, prices of pet coke in the domestic market may not soften as these are always 5-10% cheaper than that of the imported material. Thus, major consumers prefer the domestic stuff.

"At present, demand for pet coke in India is in excess of availability and so consumers are taking recourse to importing the material. With the commissioning of the new facility, domestic availability will increase significantly, particularly in southern India," the official said.

Domestic pet coke, at present, is largely a region-centric product since the material being produced in Gujarat is mainly consumed by cement plants based in the western and northern parts of the country.

"A part of the material from Gujarat that is currently going to south India may be impacted but, overall, it is the imported material that will get affected," said an official from another cement company.

MRPL's pet coke output is likely to be consumed by cement plants in Tamil Nadu and Karnataka, a number of which use the imported counterpart.

Several cement plants in India use pet coke for blending with steam coal because the per calorie cost of energy comes down significantly for them because of the high heat value of pet coke compared to that of steam coal.

But, as pet coke is a region-centric material, not all cement or power plants use domestic pet coke because the major refineries are located in Gujarat, central and northern India and transportation costs go up significantly.

"Thus, despite there being a production capacity or nearly 12 million tons per annum, the actual production of pet coke is at only 9-10 mtpa as refineries operate at a mere 75-80% of their capacity because of low demand from consumers located at a distance. Also, some plants find imported pet coke more economical," the source said.