Strategic Shift in Feedstock Sourcing
Haldia Petrochemicals Ltd (HPL) is preparing to broaden its raw material base in 2027, a strategic move designed to insulate the company from geopolitical supply shocks. Sanjiv Vasudeva, the company’s Chief Marketing Officer, confirmed in an interview with Reuters that the firm will begin processing condensate and up to 30% LPG at its cracker in eastern India next year.
This diversification is a direct response to recent disruptions in the Middle East, which have historically been a primary source for HPL’s naphtha requirements. Vasudeva noted that the current supply environment has fundamentally changed, stating, "Life will not be the same," referring to the volatility in traditional supply chains.
Impact of Recent Disruptions
HPL, one of India’s two major naphtha importers, typically sources 50% of its feedstock from domestic sources and the remaining 50% from Middle East suppliers. However, recent conflicts in the region forced the company to operate at a reduced capacity.
Vasudeva disclosed that the cracker ran 10% to 15% below its full capacity on at least two occasions during the disruption period. To bridge the gap, HPL purchased expensive spot naphtha and, for the first time, sourced Russian crude oil from traders under a US waiver. During this period, Russian barrels accounted for 20% to 30% of the company’s total feedstock.
While Russian volumes are currently "minimal," HPL intends to keep this option open for 2027 if sanctions remain lifted or waivers continue to be granted.
Current Supply Channels and Capacity
Since late June, HPL has re-established supply lines with major Gulf producers, including Abu Dhabi National Oil Company (ADNOC) and Kuwait Petroleum Corp. Exports from QatarEnergy have also recently resumed. The company purchases these materials on a delivered and free-on-board basis from locations outside the Strait of Hormuz to mitigate transit risks.
HPL maintains a 200,000-ton-per-year supply contract with QatarEnergy and received its 50,000-ton allocation for the current quarter, according to Vasudeva.
The company’s West Bengal plant has a significant processing footprint, including: * 700,000 tons per year of ethylene capacity. * 491,000 tons of chemical processing capacity. * Approximately 1 million tons of polymer capacity.
Subsidiary Adperma Expansion
Beyond feedstock strategy, HPL is advancing its downstream capabilities through its group subsidiary, Adperma. Vasudeva, who also heads Adperma, announced that the unit will commence commercial production of acetone and phenol from the end of December.
Haldia Petrochemicals, which is majority-owned by US-based private equity firm The Chatterjee Group, plans to list Adperma in the second half of 2027. This move aims to capitalize on the growing demand for these chemical intermediates in India’s manufacturing sector.