HPL plant closure exerts pressure on IOC's Haldia plant to bear extra costs of re-routing naphtha

21-Jan-15

Operations at Haldia Petrochemicals Limited have been suspended since July 7 due to a shortage of working capital. Naphtha to this plant was being supplied by Indian Oil Corp's Haldia plant- about 1,00,000 ton of naphtha was being supplied every month when the plant was running at its full capacity. The proximity of both the plants helped in saving logistic and transport costs, which is not the case now. The HPL plant closure is reported to be having an impact on IOC as it bears extra cost to route its naphtha to other facilities so that inventory does not stockpile. " HPL is not taking any more naphtha, but whatever we are producing is being consumed by various others sources. We are now sending around 10,000 to 12,000 MT of naphtha per month to our refinery in Panipat and other sources," IOC executive director Y K Gupta was reported by Business Standard. But sources said that availability of railway rakes was proving to be a major hindrance in sending naphtha to Panipat. "Availability of rakes is a huge problem as one rake has a maximum capacity of carrying around 2,000 tons of naphtha, so to transport 12,000 tons we have to bear the cost of six railway rakes," as per the source. Experts say that without a backward integration it is difficult for a standalone refinery to maintain functions.