1. Petroleum Refineries: Location
  2. @raw material site: Disadvantages
  3. Refineries @ port locations
  4. Reliance Jamnagar Refinery: Location Factors
  5. Refineries @Market Location: Advantages
  6. Synthetic fibers

In the previous article, we saw the geographical factors responsible for the location of Copper smelting industry. Let’s move to the next topic:

Petroleum Refineries: Location

  • There are two stages: 1) production (drilling) 2) refining.
  • For Petroleum refineries, the raw material sources were less decisive factors for industrial location. Because industries were already setup in coalfields and did not move away due to industrial inertia.
  • Petroleum refining does not lead significant weightloss, unlike the aluminum/copper/sugarcane/timber processing.
  • Virtually all the by-products can be used. Therefore, refineries can be set up
  1. near the raw material or
  2. near the market or
  3. at an intermediate break of the bulk location (ports/coastal locations)

@raw material site: Disadvantages

  1. Refinery will become useless after oil is exhausted from oil well. So whatever millions of dollars you had invested in setting up that refinery=wasted.
  1. Oil refining close to production site represents a weightloss of 10-11 % only= not much cost saving in transport even if located near raw material site.
  2. Counter argument: refined products have higher rate of evaporation, therefore it is better to set up the refinery near the source.
  1. After 1970s, many of the Middle East and African countries started nationalizing their oil operations. The ownership of refineries/oilwells were transferred from MNCs to government owned PSUs. Hence nowadays, MNCs are reluctant to setup refineries in this region for the fear of nationalization.

Unrest/Instability as a location factor

Multinational companies do not feel confident to setup refineries inside the middle-east or South America because

  1. During Arab-Israeli war, OPEC members stopped supplying oil to countries that had supported Israel.
  2. There have been war/war-like situations due to Israel-Palestine conflicts, Iran-Iraq, Iraq-Kuwait. Such instability, destruction, aerial strikes=not good for business.
  3. In South America, there have been frequent (and violent) changes in the regimes.

Examples of Refineries @Raw Material Site

  • Assam: Digboi, Guwahati and Bongaiaon
  • Gujarat: Koyali

Refineries @ port locations

  • Middle-east/West Asia is a large producer of crude oil but there is little domestic demand because region is not industrially developed.
  • Therefore, many petrochemical complexes are located on the coast to facilitate export. Examples
Saudi Arab Ras Tanura
Kuwait Mina-El-Ahmedi
  • The development of large tankers and pipelines =bulk-transportation of petroleum possible.
  • this provides favorable condition for locating refineries and petrochemical industries near the market and near the ports

Challenge: the latest vessels are so big in size, they cannot pass through Suez and other canals

Examples of Refinaries at Port Locations:
USA refineries on East Coast of USA:

  • get crude oil from Venezuela and West Asia
  • the transport the final products via pipelines and tankers to markets of Philadelphia, Chicago and great Lakes region
  • use of pipelines to transport oil first begin in Pennsylvania USA, before that, oil was transported via Railways in wooden barrels but was far too expensive and inefficient
EUROPE refinery clusters are found near port locationse.g. Rotterdam and Thames: making it easier to transport the final products via pipelines, river-barges and railroads
JAPAN Since Japan depends on imported oil, the refineries are setup @ coastal industrial regions e.g Honshu island.
  • Reliance refinery (Jamnagar, Gujarat) near sikka port.
  • other refineries near coastal areas: Trombay, Mangalore, Kochi, Chennai, Vishakhapatnam, Haldia

Reliance Jamnagar Refinery: Location Factors

At village Motikhavdi, Taluka – Lalpur, District – Jamnagar, Gujarat.

FACTOR impact
  • Sikka all-weather Port. Proximity to the Gulf of Kutch, permits easy import from the Middle-East crude oil sources.
  • Reliance has setup a pipeline to directly transport crude oil from Sikka port to its Jamnagar refinery.
  • The refinery has a capacity of processing ~600,000 barrels of crude oil per day
  • Even makes Aviation Turbine Fuel (ATF).
  • Reliance has its own thermal power plants in this district.
  • Refineries need skilled workers. And skilled workers=mobile. Hence labour is not the deciding factor for location.
  • Reliance has setup a self-contained township, for over 2,500 of the employees – with schools, hospitals, supermarket etc.
  • District connected to National Highway 8
  • State highways connect it to industrial regions in A’bad, Vadodara, Bharuch (helps its synthetic textile units in those districts).
  • Same Sikka port facilitates exports to more than 25 countries, including to the US and Europe.

Refineries @Market Location: Advantages

  • You can use raw material (crude oil) supply from more than one oilfield of more than one country. So even if oil well is exhausted from country X, you can shift to country Y.
  • After refining, the finished petroleum products can be supplied to interior areas pipeline connection and trucks/tankers.
  • In Europe, manufacturing industries also consume a large portion of petroleum products therefore refineries are also located in major manufacturing centers, where petroleum products are demanded. e.g. Antwerp, Rotterdam and Southampton.
  • Refineries in Chicago, Philadelphia and New Jersey.
  • After Second World War, Soviet government aimed for decentralized industrial development.
  • Because in WW2, they had suffered massive damages in bombings because industries were concentrated only at a few places near Ukraine and Moscow.
  • Therefore new refineries were constructed near the markets / consumption centers
  • Baruauni @Bihar
  • Mathura @UP
  • Panipat @Haryana

Challenges: environmental activism/laws/regulations fears of explosion, terrorism. Hence becoming difficult to setup refineries near market location.

Synthetic fibers

What’s the difference between:
  • Rayon
  • from natural cellulose from wood pulp
  • nylon, and polyester
  • they are produced chemically from coal or petroleum byproducts
Near pulp mills near petrochemical refineries

Synthetic Fibre Industry: Location factor

  • The base material for most of the true synthetic fibers= benzene fraction of crude oil
  • Benzene= liquid, evaporates quickly, hazardous to transport.
  • Therefore synthetic fiber factories located near/inside petrochemical industry.
  • Synthetic fibers =non-bulky, non-perishable =easily transported.
  • Therefore, synthetic fiber industry need not be setup near market location.
  • Although, with the progress in transport-cargo facilities, nowadays synthetic fiber industry is not always in close proximity with petroleum industry. Example in USA- while Petroleum refining business is concentrated in Southern parts, you can find synthetic fiber industry scattered throughout the country.

India- Synthetic fibre industry:

  • In the late 60s, Dhirubhai Ambani started Reliance for textile manufacture @ Naroda near Ahmedabad, Gujarat.
  • But since polyester is made from petrochemicals, so he entered in Petrochemical business. But petrochemical is derived from Petroleum refining, so he moved into Petroleum refining as well.
  • Finally Jamnager refinery @Gujarat. Thus he achieved complete vertical integration in the supply chain from crude oil to synthetic fibers (even garments via “only vimal” brand).
  • Now Jamnagar refinery=> intermediate raw materials to Reliance’s textile units @Dahej, Naroda, Vadodara in Gujarat.
  • Similarly Oil discovery in Ankaleshwar-Sanand-Kalol led to growth of Synthetic textile industry in this region of Gujarat.

In the next article, we’ll look at the geographical factors responsible for the location of Natural Gas & Fertilizer industry.
visit Mrunal.org/geography for the Archive of all geography articles published so far.