El Nino Strikes India Refinery as Lack of Water Shuts Crude Unit

  • MRPL shuts 1 of 3 crude units, closing some secondary units
  • Company may shut other crude units if water shortage persists

The worst drought in decades is leaving an oil refinery in southern India parched.

Mangalore Refinery & Petrochemicals Ltd. shut a crude-processing unit at its facility on Thursday because of a water shortage, according to M. Venkatesh, its refinery director. The company known as MRPL is also closing other smaller units, leading to reduced production of fuels including gasoline and diesel, he said by phone on Friday.

The El Nino phenomenon that’s triggered dry weather has left millions of Indians grappling with severe drought, and also affected companies whose facilities need steady supplies to continue operations uninterrupted. After weak rainfall over the past two years, the country’s dams have dried up and its 91 major reservoirs are less than one-fifth full. The upcoming monsoon may bring some relief, but a challenge looms from competition for scarce groundwater and surface supplies among farmers, industries and cities.

“The district is facing a drinking-water crisis,” MRPL’s Venkatesh said. “We may have to shut other crude units if the situation does not improve. We are currently managing other operations through domestic sewage water.”

MRPL runs a refinery with processing capacity of 15 million metric tons a year in the southern Indian city of Mangalore. The current shutdown will curb diesel output by 50 percent, gasoline by 30 percent and liquefied petroleum gas by 60 percent, according to Venkatesh. The company may close its other two crude units at the facility if the water scarcity persists, he said.

This isn’t the first time the plant is being affected by a lack of water supply. MRPL shut its entire refinery in April 2012 and stopped oil-product sales to customers because of a shortage amid declining availability of water in the Nethravathi River in the southern state of Karnataka.

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