Commencement of production at IOC's naphtha cracker delayed?

Operations seem to be delayed at the naphtha cracker unit being built by state-run refiner Indian Oil Corporation (IOC) with production slated to commence by September 2009, instead of the earlier planned 2008. The new plant will process between 2-2.3 million tpa of naphtha, producing 0.9 million tons of ethylene, 0.7 million tons of propylene, 0.13 million tons of benzene and 0.3 million tons of pyrolysis gasoline. Indian refiners are setting up petrochemicals projects to use surplus naphtha for value addition and to improve the viability of refineries in a scenario of tight fuel prices. India has seen a fall in demand for naphtha since it began importing liquefied natural gas (LNG) last year, encouraging state-run power stations and fertiliser plants to opt for cheaper gas. IOC has seen a larger dip in domestic sales as compared with other refiners, as it supplies naphtha to most public fertiliser and power firms. Reliance Industries (40 million cubic metres of gas a day) and Gujarat State Petroleum Corp. are to produce large volumes of gas shortly. Oil refiners are feeling the need to line up petrochemical plants as they expect a naphtha surplus surge after 2009 when domestic gas supplies from giant fields start production.