IOC, BP join hands to set up acetic acid plant
New Delhi   24-Nov-2011

After joining hands with Mukesh Ambani-promoted Reliance Industries (RIL), global energy company BP on Wednesday signed a memorandum of understanding (MoU) with IndianOil (IOC) to set up a joint venture (JV) company.

BP and IOC plan to set up 50:50 joint venture to set up a 1 million tonne per annum acetic acid plant in Gujarat and erect infrastructure for associated gasification facilities for production of synthethic gas, the companies said in a statement.

They did not divulge the size of the investment that they may have to make in the project.

“A joint feasibility study is under way to confirm the exact configuration of the project that would have a targeted start-up date in 2015,” both IOC and BP said.

Acetic acid is used in the petrochemicals and paint industry. On the other hand, synthetic gas is produced as a byproduct of acetic acid.

At present, there is demand for about 600,000 tonnes of acetic acid in India that may rise to 1 million tonne by 2015.

“IOC joining hands with BP for an acetic acid plant is a major diversification step. There are increasing demands for specific chemicals that these companies are trying to tap,” said an industry official requesting anonymity.

At present, IOC operates a 13.7 million tonne per annum refinery at Koyali in0 Gujarat.

The feasibility study for new acetic acid plant is carried out in the vicinity of existing Koyali refinery.

“The proposed acetic acid plant would employ BP’s latest Cativa XL technology while gasification facilities would utilise petroleum coke feedstock from IOC,” the statement added.