What was till now a popular model in the road sector has now become a strategy for cash-strapped Indian Oil Corporation to save on capital investment. The company has managed to bring down the cost of its Rs 29,777-crore Paradip refinery by Rs 5,000 crore, by taking recourse to the build-own-operate-transfer (BOOT) model.
It has outsourced work for its nitrogen and hydrogen units, crude and product tankages and water line to different companies. This is the first time IOC has followed the BOOT model on such a large scale. It had earlier experimented with the model during the construction of the Panipat refinery, where the nitrogen plant was built on a BOOT basis.
IndianOil is setting up a 15-million tonne refinery at Paradip, expected to go onstream by 2012-end. The nitrogen and hydrogen units are being constructed by US-based Praxair. The company will build a hydrogen plant with a capacity of 90 million standard cubic ft a day and a nitrogen plant of 500-tonne a day capacity. The crude and product tankages will be constructed by IOT Infrastructure & Energy Services, a joint venture company between IndianOil and Oiltanking GmbH. These companies will operate the units for 15 years.