Hindustan Petroleum Corporation Ltd plans to invest over Rs 2,787 crore (Rs 27.87 billion) to raise capacity of its Mumbai and Vizag refineries through de-bottlenecking and process upgradation for higher volumes and better fuel quality.

De-bottlenecking of the primary and secondary processing units would result in HPCL's Mumbai refinery capacity going up to 7.9 million tonnes from 5.5 million tonnes, while Vizag capacity would go up to 8.3 million tonnes from 7.5 million tonnes, official sources said in New Delhi.

The Rs 1,152.2 crore (Rs 11.52 billion) project, which includes a foreign exchange component of Rs 178.5 crore (Rs 1.78 billion), would maximise Mumbai refinery distillate yeild and enable it to produce Euro-III specification petrol and diesel. Currently, it produces petrol and diesel meeting Euro-II standards. The project is expected to be completed in 30 months.

HPCL's Vizag refinery, which already produces part petrol and diesel of Euro-II specification, would spend Rs 1,635.1 crore (Rs 16.35 billion) for upgradation of primary/secondary units in 30 months. This includes a foreign exchange component of Rs 252.4 crore (Rs 2.52 billion).

Sources said the investment in refinery upgradation had become necessary because of government plans to implement Euro-III and Euro-IV vehicular emission norms in the country in phases by 2010.

The implementation of the norms would necessiate improving the fuel quality by reducing sulphur and benzene content on part of the refiners and upgradation of vehicle engine by the automobile manufacturers.