NEW DELHI - India's Hindustan Petroleum Corp Ltd (HPCL) hopes to operate its 15 million metric tonnes per year (tpy) Vizag refinery at full capacity early next year after commissioning some new secondary units geared to upgrade fuels, its head of refineries said on Thursday.

In March, the state-controlled refiner raised the crude processing capacity of the Vizag plant, located in Southern India, from 8.33 million tonnes per year by replacing an old unit with a new 9-million-tonnes-per-year crude unit in March, S. Bharathan told reporters at an event.

Refinery operations at full scale will increase HPCL's crude imports and enable it to process fuel oil to produce expensive refined products such as gasoline and gasoil, helping boost the company's profit margin.

In two months, HPCL will commission a 3.5 million tpy hydrocracker, a sulphur recovery unit, and a hydrogen unit, said Bharathan. A residue hydrocracker of similar capacity will also be commissioned by the end of this year, he added.

The two hydrocrackers will upgrade heavier feeds such as vacuum gasoil and bitumen into value-added fuels such as jet fuel, gasoline, and diesel.

The residue hydrocracker will enable the processing of about 1 million tpy of fuel, he said, adding the fuel oil imports could begin from the middle of 2024 "depending on economics".

When asked about crude sources for its expanded capacity, he said, "Middle East, West Africa and the U.S. are major sources, and Russia now."

He said HPCL will be the first Indian refiner to start an electrolyser with a capacity of 370 tpy in two months. The electrolyser will help produce green hydrogen for the Vizag refinery.

HPCL also operates a 9.8 million tpy refinery in Mumbai in the western Indian state of Maharashtra.

(Reporting by Nidhi Verma in New Delhi; Editing by Savio D'Souza and Janane Venkatraman)