Shell India and Oil & Natural Gas Corporation will set up a high-grade bitumen refinery at Mangalore in Karnataka. Shell might take up equity participation and also bring in technology.

The details of plant capacity and investments would be worked out once the two companies reach an agreement.

Bitumen will be sourced from refineries and modified to meet the demand for higher-grade varieties of the product. Shell already has a range of bitumen products in India. The Mangalore plant will modify bitumen sourced from ONGC’s Mangalore Refinery & Petrochemicals Ltd (MPRL). The new company may also market the product.

India's bitumen requirement had increased following large-scale road construction activities. Bitumen production increased to 3.3 million tonnes in 2004-05 from 2.72 million tonnes in 2000-2001.

The company is also planning to set up a mixing plant at Haldia in West Bengal for modifying bitumen.