^ Indian refining sector
Article by David Sear
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Background
A recent speech by IndianOil chairman Mr. S M Vaidya perfectly exemplifies the refining sector’s commitment to invest in the coming years. During IndianOil’s 62nd Annual General Meeting in New Delhi, Mr. Vaidya referred to India’s energy future and reported that “many forecasts see Indian fuel demand climbing to 400-450 million tonnes by 2040 from the present 250 million tonnes. This offers enough legroom for all forms of energy to co-exist.”
Catering to this surge in demand, IndianOil for one plans to roll out new projects. Commented Mr. Vaidya: “these translate into refining capacity expansion of over 25 million metric tonnes per annum (MMTPA), including CPCL, and an investment commitment of close to Rs one lakh crore over the next 4 to 5 years.”
Areas for attention for IndianOil are understood to include optimally integrating current refining processes to yield more chemical products per barrel of oil, as well as developing alternative energy options, such as CNG, LNG, H-CNG, biofuels, hydrogen and e-mobility.
Valve requirements
The huge investments planned by IndianOil as well as other companies will inevitably create significant sales openings for valve makers and suppliers. Looking for a reliable, quantitative assessment of this opportunity, The huge investments planned by IndianOil as well as other companies will inevitably create significant sales openings for valve makers and suppliers. Looking for a reliable, quantitative assessment of this opportunity, this journal approached Resolute Research (https://resoluteresearch.com) with a request for data concerning predicted future valve and actuator purchases in the Indian refining sector.
Chart 1: Total valve and actuator sales in India by year (in USD million). Courtesy of Resolute Research.
Chart 1 for instance details total sales for the years 2021 through to 2026 and reveals that total expenditure on isolation valves (manual and actuated), control valves and pressure relief valves could top a massive 1,920 million US dollars! Broken down into original equipment sales as well as aftermarket sales, the figures indicate an expenditure of roughly USD 1,040 million on sales for new-build projects, with some USD 880 million earmarked for aftersales.
When interpreting chart 1, please do bear in mind a warning issued by Resolute Research about how data is recorded. For reasons of practicality, all expenditure for newbuild plant construction is allocated to the targeted year of commissioning. In practice, of course, spending on valves for large projects is likely to be spread out over multiple years. This may explain the large ‘spike’ for 2024.
Chart 2: Total valve and actuator sales in India in 2024, by valve type (in million USD).
Courtesy of Resolute Research.
Resolute Research are also capable of further dissecting data to pinpoint sales per valve type. Taking total sales for 2024 as an example, chart 2 clearly indicates that gate valves will account for the lion’s share of all sales (both for new-build facilities as well as aftersales). In monetary terms, over USD 430 million is forecast to be spent on gate valves. Another important linear valve – the globe design – occupies second place in the sales list, at almost USD 150 million in 2024. Again, do note that the figures on this chart reflect the monetary value of valves that will be put into service, and not necessarily purchased, in 2024.
Finally, publicly available project data puts the number of active refineries in India at 22, with five announced, two at the planning stage and a single refinery as decommissioned. Just for the record, the oldest refinery – Digboi – dates from 1901 whilst the most recently opened is Paradip (2015). Looking at forecast capacity expansions in existing refineries, Vadinar stands out for the sheer scale of the plans. These call for capacity to more than double, from the current 405 barrels per day to 920 barrels per day in 2024. Further large-scale refining additions are to be expected at Mangaluru, Panipat, Paradip, Koyali, Barauni and Numaligarh.