L&T Wins ‘Major’ BPCL Petrochemical Contract Worth Up to ₹10,000 Crore; Stock Edges Higher

Larsen & Toubro (L&T) has secured a significant contract valued between ₹5,000 crore and ₹10,000 crore from Bharat Petroleum Corporation Ltd (BPCL), reinforcing its leadership in India’s downstream hydrocarbon engineering and construction space. The order involves the engineering, procurement, construction, and commissioning (EPCC) of a massive polyethylene manufacturing unit at BPCL’s Bina refinery complex in Madhya Pradesh.

The project involves setting up two polymer trains with a combined capacity of 575 kilo tonnes per annum (KTPA) each. Once completed, this linear low-density polyethylene (LLDPE) and high-density polyethylene (HDPE) “swing unit” will be the largest of its kind in India. The contract is being executed on a Lump-Sum Turnkey (LSTK) basis.

Following the announcement, L&T shares edged higher on the NSE, trading at ₹4,082.20 (up 0.24%) during the afternoon session, touching an intraday high of ₹4,095.00.

Subramanian Sarma, Deputy Managing Director and President at L&T, commented: “This is a major order that will not only strengthen our balance sheet but also provide impetus to our demonstrated credentials in the downstream hydrocarbon EPC space.”

Central to BPCL’s ₹49,000 Crore Expansion

The new polymer unit is a critical component of BPCL’s broader ₹49,000 crore Bina Petrochemicals and Refinery Expansion Project. This initiative aims to raise the refinery’s capacity from 7.8 million tonnes per annum (MMTPA) to 11 MMTPA, transforming it into a fully integrated petrochemical complex. The project aligns with the ‘Aatmanirbhar Bharat’ mission by significantly boosting domestic polymer production for the packaging, automotive, and consumer goods sectors.

Accelerating the Green Energy Transition

While cementing its dominance in the hydrocarbon sector, L&T is simultaneously scaling its green energy portfolio. The company is targeting annual renewable EPC orders of 10–12 gigawatts (GW), with an ambitious goal to reach a cumulative renewable portfolio of nearly 38 GW by FY26.

In the green hydrogen space, L&T has established a primary manufacturing base at Hazira, Gujarat, where it pioneered a 1 MW indigenous electrolyser. The company recently achieved a new milestone with its 1 MW facility at the Kandla Green Hydrogen Hub (Deendayal Port), which is now operational and producing approximately 18 kg of hydrogen per hour.

Executive Summary

L&T has clinched a landmark contract from BPCL worth up to ₹10,000 crore to build India’s largest LLDPE/HDPE swing unit at the Bina refinery. This project is the linchpin of BPCL’s ₹49,000 crore expansion to increase refining capacity to 11 MMTPA. While maintaining its leadership in hydrocarbons, L&T is successfully diversifying into green energy, evidenced by its operational 1 MW electrolyser projects in Hazira and Kandla, positioning the firm as a leader in India’s dual energy transition.

FAQs

Q1: What exactly has L&T won from BPCL? 

L&T won an EPCC (Engineering, Procurement, Construction, and Commissioning) contract to build India’s largest LLDPE/HDPE swing unit, consisting of two production trains with a capacity of 575 KTPA each.

Q2: How much is the contract worth? 

It is valued in the range of ₹5,000 crore to ₹10,000 crore, which falls under L&T’s “Major” order internal classification.

Q3: What is a “swing unit”? 

A swing unit offers operational flexibility by allowing the facility to switch production between Linear Low-Density Polyethylene (LLDPE) and High-Density Polyethylene (HDPE) based on current market demand.

Q4: How does this impact BPCL’s Bina refinery? 

It integrates downstream petrochemical production directly into the refinery, which is undergoing a massive capacity hike from 7.8 MMTPA to 11 MMTPA.

Q5: What is L&T’s progress in Green Hydrogen? 

L&T has successfully operationalized 1 MW electrolysers at both its Hazira manufacturing plant and the Kandla Port hub, utilizing indigenously developed technology to produce green hydrogen.