IndianOil plans Rs 2,850-cr coker unit at Haldia refinery
New Delhi   13-Aug-2010

With improved cash flow, Indian Oil is back in the spending mode.

According to sources, the company is in an advanced stage of firming up a Rs 2,850-crore proposal for setting up delayed coker project at its Haldia refinery.

The proposal may be placed for board approval this month.

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

Board approval

Sources told Business Line that the company would seek board approval for the project as early as in August.

It was estimated that the project would improve the distillate yield by 10 percentage points and increase the refining margin of Haldia Refinery by a handsome $1-1.5 a barrel. Indian Oil has already identified Foster Wheeler as the technology licensor. The draft tender document for inviting project management consultancy is ready and will be floated soon after availing the board approval.

Refining margin

Currently rated as the third most profitable refineries run by the company, refining margin of Haldia has improved substantially in the recent years following commissioning of a crude pipeline from Paradip port and the recently commissioned Rs 2,800 crore hydro-cracker project.

The company had previously planned to set up a Rs 5,000 crore paraxylene plant in the downstream of the Haldia refinery.

Previous plan

The project was supposed to convert naphtha produced in the refinery into paraxylene, used as a raw material for manufacturing purified terephthalic acid or PTA. Land was also sought from the state government for the project.

The project is currently put in the backburner.