Indian Oil increases petrochem investment at Paradip

06-May-05

Indian Oil Corporation (IOC) has increased the investment in its planned refinery at Paradip from Rs 11,000 crore to Rs 19,000 crore to provide resources for a petrochemicals complex within the project. The task of preparing a feasibility report for the revised plan to include the petrochemicals unit has been entrusted to Shell Global and Engineers India, and is due in July. The feasibility report for the Paradip refinery is being prepared for capacities of 9 million tons and 15 million tons of paraxylene, polypropylene, PVC and styrene. The Bengal government had refused to respond to IOC's offer of Rs 5,700-crore investment to develop Haldia Petrochemicals (HPL) into a world-class petrochemical hub in lieu of management control in HPL. The Government's decision to support Purnendu Chatterjee, who has been keen on management control of HPL, eventually prompted IOC to think of Paradip as an alternative in the east. IOC has committed to complete the Paradip refinery by 2009-10, but is willing to advance it to 2008-09 in the event of high demand for petroleum products. IOC is investing Rs 6,300 crore in a petrochemicals complex at its Panipat refinery. A naphtha cracker and polymer complex are being set up even as the refinery's capacity is doubled to 12 million tons. The petrochemicals business, in which the Reliance-IPCL combine enjoys a near-monopoly, is concentrated in the western part of the India. With its projects at Panipat and Paradip, IOC will get a chance to break into the northern and eastern regions. Of the Rs 24,399 crore that IOC plans to invest in the Tenth Plan (2002-07), 45% has been earmarked for petrochemicals, indicating that petrochemicals is the new thrust area for IOC.