IndianOil tweaks Paradip plan
New Delhi   19-Oct-2010

Rising local demand for fuel has forced IndianOil (IOC) to shelve plans to export refined products from its Paradip refinery, which is being built at a cost of Rs 29,777 crore.

The plant is to be commissioned by the end of the next fiscal.

“We were hoping to export products from the refinery, but the dynamics have changed. Being a state-run firm, our priority is to meet local demand. We will hardly export anything from Paradip as the entire production will be consumed by the domestic market,” IOC director (refineries) B.N. Bankapur said.

The refinery is expected to annually produce 536,000 tonnes of LPG, 124,000 tonnes of naphtha, 3.41 million tonnes (mt) of petrol, 1.45mt of ATF and about 6mt diesel.

Bankapur said IOC had initially hoped to export around 2mt of petrol and 124,000 tonnes of naphtha annually from the refinery.

“But with petrol demand growing 13-14 per cent and that of diesel by 8-10 per cent, I don’t think we will be left with any product to export,” he said.

The country’s fuel demand rose 3.4 per cent in 2009-10 and is estimated to rise 5.7 per cent this fiscal. IOC and its subsidiaries control about 34 per cent of the country’s 3.72 million barrels per day (bpd) installed refining capacity.

A portion of the 200,000 tonnes of propylene to be produced by the unit may be exported, he said.

Bankapur said the refinery would start production by March 2012 when it would commission the primary units such as crude distillation. Secondary units will be commissioned by July 2012, and operations stabilised by November.

He said IOC might raise the capacity of its Koyali refinery in Gujarat to up to 360,000 bpd from 274,000 bpd. “By the end of this fiscal, we will get to know whether to raise the capacity of Koyali refinery or not. If we raise it, it will be either 320,000 bpd or 360,000 bpd.”

He said the PSU refiner had sought the Supreme Court’s approval to raise the capacity of its 160,000 bpd Mathura plant to 220,000 bpd.

The refinery — about 40 km from the Taj Mahal — has been under the scanner after environmentalists moved court saying pollution was affecting the white marble structure.

Besides the refinery, the Paradip project includes a Rs 1,793-crore pipeline to Raipur and Ranchi. The 1,100-km pipeline will carry fuel to consumers in Orissa, Jharkhand, Chhattisgarh and Madhya Pradesh.

A marketing terminal is also being built at the cost of Rs 414 crore.

IOC may engage firms such as Saudi Aramco and Kuwait Petroleum as equity partners in the Paradip refinery if they agree to supply most of the crude requirement of the 15mt unit.