Hindustan Petroleum (HPCL), an Indian state-owned refiner, has issued an unusual 12-month procurement to purchase 354,000t of bulk bitumen for delivery to six different sites around the country.
HPCL plans to purchase VG30 and VG40 grade cargoes at a “port-based procurement price”.
After posting the announcement on May 8, the refiner asked for proposals by May 22. The ports of Mundra, Pipavav, Mangalore, Haldia, Chennai, and Kadapa are all on HPCL’s list of potential destinations for the 215,000t of VG30 grade bulk bitumen they plan to purchase. An extra 139,000 metric tonnes of VG40-grade bitumen is for sale in bulk from the same six suppliers.
According to the RFP, the bidder must have installations within 50km of the closest port from where HPCL will receive supplies, with tankage capable of holding at least 2,000t of bulk bitumen VG30/VG40 and related heating facilities. The component may be obtained from either domestic or foreign suppliers.
HPCL operates two refineries with a combined capacity of 190,000 barrels per day (b/d) in Mumbai and 166,000 b/d in Visakhapatnam. The company is currently shopping for bitumen cargoes to ship to areas in which it does not have a refinery.
HPCL is a major bituminous provider in India’s domestic market, alongside state-controlled rivals Bharat Petroleum (BPCL) and Indian Oil Corporation (IOC). Over the course of the past twelve months, BPCL has filed import bids for shipment to areas where it does not own a refinery. The Indian government prioritises infrastructure development; hence this was done to ensure adequate supplies.
Bitumen usage in India is expected to exceed 8 million tonnes in 2023, an increase of at least 100,000–300,000 tonnes from 2022. Its consumption peaked in 2022 at 8.2 million tonnes, the most since the oil ministry began reporting it publicly in 1999.
Even though demand has dropped because of the Covid-19 outbreak, the country’s net deficit of bitumen has grown, and domestic refiners have begun issuing tenders to make up the difference. In 2022, India imported almost 2.4 million metric tonnes of bitumen from the Middle East, making it the world’s largest importer of road paving ingredients.