The economic downturn has forced Indian Oil Corporation (IOC) to shelve plans of a 15 mln ton refinery at Haldia. In September 2006, IOC had signed a memorandum of agreement (MoA) with the West Bengal government to develop Haldia as a Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR). The agreement envisioned setting up of a 15 mln ton refinery with downstream petrochemical facilities. IOC and the West Bengal government had plans to involve an international partner to help from the stage of conducting techno-economic feasibility study. However, deteriorating financial condition of several key global players has made it difficult to ascertain an interested partner, thus delaying the feasibility study. IOC is not the only company that has put on hold its expansion plan. Last week, Mangalore Refinery and Petrochemicals, a subsidiary of Oil and Natural Gas Corporation (ONGC) shelved its plan to build a 15 mln ton refinery. However, it seems that besides the economic downturn, mounting surplus refining capacity in India has also been responsible for the adjournment. India’s current surplus refining capacity of nearly 45 mln tons seems set to increase further.
The commissioning of Reliance Industries’ Jamnagar refinery has pushed up India’s refining capacity by 29 mln tpa to almost 178 mln tpa. IOC currently operates a 6 mln ton refinery at Haldia, which is being expanded to 7.5 mln tons.
04-Jun-09 
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