Reliance refinery test runs by Sept - source

Reliance Industries plans to test-run its huge new refinery by September, a little later than expected, and has started filling its tanks with extra Saudi crude oil, a top company official told Reuters.

Oil traders are counting down the days to the commissioning of the 580,000 barrel-per-day (bpd) plant, which will soak up excess heavy Middle East crude supplies and export high-quality gasoline, diesel and jet fuel to markets around the world.

Industry sources said in April that Reliance had initially hoped to begin test runs in July, still months ahead of its official December target, but even a September start would show remarkable speed for a $6 billion project that will make its Jamnagar site the world’s biggest refining complex.

"Trial runs will begin in August-September as we started filling tankages this month only," the official, who did not want to be named, said on Wednesday.

He said the additional Saudi crude would feed the new plant, run by subsidiary Reliance Petroleum adjacent to an existing 660,000 bpd plant on the west Indian coast.

"We will continue to buy extra barrels from Saudi Arabia in August as the new refinery start-up is ready. We started filling in the tank and started filling the lines and storages," he said.

Saudi Arabia, the world’s top oil exporter, pledged to boost production to 9.7 million bpd this month, the highest in more than 30 years and an increase of 550,000 bpd versus May.

Reliance Industries has said it had signed up to take 30 percent of any incremental Saudi supply, but most Asian refiners turned down offers of extra barrels in June and July amid weaker demand in Japan and loss-making margins in China.

Last week, Reliance Petroleum said the new unit was 94 percent complete and pre-commissioning activities were proceeding at a hectic pace, reiterating that the refinery was on course to be completed ahead of its initial target of December.

The refinery, in which Chevron Corp holds a 5 percent stake, will have the ability to process cheap, low-grade crude into gasoline and diesel that meet strict Western standards.

Like its existing refinery, which turned India from being Asia’s largest diesel importer to a net exporter nine years ago, the new plant is expected to make waves in the oil market.

"It will change the market structure for sure, both on the crude and products side," said an Asian trader.

Reliance has been more active on the Middle East crude market in the past two months, buying at least one cargo of heavy sour Qatari Al Shaheen crude for August loading, and some lighter Abu Dhabi Murban crude, which traders said may feed to the new plant.