IndianOil revives plan for coker unit at Haldia
Mumbai   05-Jun-2010

IndianOil has revived its earlier proposal to set up a delayed coker unit at Haldia refinery, one of its most profitable refineries, according to sources.

The delayed coker unit would replace production of black oil and parts of naphtha by petroleum coke, thereby enhancing the distillate yield and gross refining margin of the refinery.

Conceived in 2007-08, the project was originally estimated to cost Rs 350 crore. The company had also acquired additional land, adjacent to its refinery for the project. More land was sought from the State Government for setting up a Rs 5,000-crore paraxylene plant in the downstream. This, coupled with the recently implemented Rs 2,800-crore hydro-cracker project, it was felt, would improve the yield of the refinery as well as upgrade it into a refining-cum-petrochemicals complex.

The company went slow on both the delayed coker and paraxylene (a raw material for manufacturing purified terephthalic acid) projects, due to the strained financial conditions, the changing market dynamics and the huge investment requirements of Paradip refinery.

Only recently, as sources pointed out, did the company revive the delayed coker project proposal. Since the feasibility report was already in hand, the current work focused on estimating the internal rate of return (IRR) based on a project sensitivity analysis by taking into account possible volatilities in crude and product prices.

"If the IRR is found favourable, the company may seek final board approval to implement the project, shortly," a source said.

According to sources, the paraxylene project, however, has been put on the back burner as part of IOC's corporate strategy to ward off competition for its own PTA products from Panipat.