- HPL to add condensate, up to 30% LPG to cracker feedstock
- HPL sources 50% of feedstock domestically, with rest from Middle East
Haldia Petrochemicals Ltd (HPL) plans to diversify its cracker feedstock mix from 2027 as it seeks to strengthen operating stability and reduce exposure to disruptions in Middle Eastern supplies.
The move is significant for HPL’s polymer chain, as feedstock availability directly determines cracker operating rates and the supply of ethylene-based products. HPL’s West Bengal complex has 700,000 tonnes/year of ethylene capacity and around 1 mnt/year of polymer capacity.
Feedstock disruption affects polymer operations
HPL’s cracker operated 10-15% below capacity on at least two occasions during the Middle East supply disruptions. The company was forced to procure higher-cost spot naphtha and, for the first time, sourced Russian barrels through traders under a US waiver.
Russian material accounted for around 20-30% of HPL’s feedstock during the disruption period, although volumes have since fallen to minimal levels.
For polymer markets, lower cracker utilisation can tighten availability of downstream polymer grades even when demand remains stable. Any prolonged disruption can also raise replacement costs for producers and downstream converters, particularly when alternative feedstock has to be sourced from the spot market.
HPL broadens cracker feedstock options
From 2027, HPL plans to process condensate and up to 30% LPG at its eastern India cracker. This will allow the company to adjust its feedstock slate according to availability and supply conditions rather than relying predominantly on naphtha.
HPL typically sources around 50% of its feedstock domestically, with the balance coming from Middle Eastern suppliers. The planned diversification could therefore provide greater flexibility in maintaining cracker operations when a particular supply route is disrupted.
The strategy also has implications for polymer supply continuity. Higher feedstock flexibility could reduce the risk of prolonged operating-rate reductions and support more consistent availability for downstream users across packaging, consumer products and other polymer-consuming segments.
Middle East supplies resume
HPL has resumed sourcing from Abu Dhabi National Oil Company and Kuwait Petroleum Corp since late June, while QatarEnergy exports have also recently resumed.
The company has a 200,000 t/year supply contract with QatarEnergy and received its 50,000 t allocation for the current quarter. HPL is also buying feedstock on delivered and free-on-board terms from locations outside the Strait of Hormuz.
The return of Middle Eastern supplies should ease immediate feedstock constraints. However, HPL’s decision to introduce condensate and LPG indicates a broader shift towards maintaining feedstock optionality for its polymer operations.
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