India’s second largest state-owned oil refiner and marketer Bharat Petroleum Corp. Ltd. (BPCL) plans to offer shares in the Bina refinery next year to fund its expansion, according to BPCL Chairman and Managing Director S. Varadarajan.

BPCL owns a 50% stake in Bharat Oman Refineries Ltd., which built the Bina refinery unit. Oman Oil Co. owns a 26% stake, while the remaining 24% is held by several financial institutions.

Varadarajan said that BPCL has approved a debottlenecking project for the Bina refinery and is seeking government approval for fresh capital as Oman Oil Co. will not participate in funding the expansion of the refinery.

The capacity of the Bina refinery in Madhya Pradesh will be upgraded in two phases: from the current 6 million tonnes to 7.8 million tonnes per year by 2018, and to 15 million tonnes in the second phase. The capital required in the first phase is INR 3,500 crore (USD 536 million). Additional investment in the second phase is estimated at INR 18,000-20,000 crore (USD 2.75-3.06 billion).

“The demand in the central and the northern parts [of India] is very attractive. We need to meet the demand by moving products from the coast,” Varadarajan told shareholders during BPCL’s annual general meeting last month.