Reliance Petroleum has informed us that the company has successfully completed the second year of implementation of its complex refinery, coming up in a special economic zone at Jamnagar. The company has achieved 82% overall progress in just 24 months since commencement of the project. Based on the progress so far, the company is on course to complete the project ahead of its initial schedule of December 2008.
During the quarter, the project engineering activities were completed with all drawings for concreting, structural steel, underground piping as well as electrical and instrumentation released for construction. Residual engineering activities to support ongoing construction are continuing. Successful completion of this massive engineering effort in less than two years has set a new global record in the refining sector: It also reflects the success of a team effort that involved over 7,500 engineers, working from several interconnected locations across the world.
The quarter witnessed near completion of procurement activities for the project as well. The procurement and contracting for equipments, tagged items and bulk materials is now complete. Equipment deliveries have gained enhanced momentum with over 3,800 equipments, including several ODCs and super heavy equipments, delivered at site already. Nearly all the bulk materials, including pipes and fittings as well as substantial part of electrical and instrumentation bulks have also been received at site. Thrust on vendor follow- up for the balance equipments is continuing. Simultaneously, focus is shifting towards procurement close-out during the coming quarter.
The company expects to benefit from decline in lead price in LME to US$2,532/t in Dec07 from a peak rate of US$3,666/t in Oct07 from Jan08 onwards.The company expects its average cost lead to be benchmarked to around US$2,500/t in Q4FY08E, which is 21% lower than its average benchmark cost of US$3,200/t.
