IOC to pump Rs 5000 cr into Panipat refinery

Indian Oil Corporation (IOC) is planning to invest Rs 5,000 crore to expand the capacity of its 12 million tonne (mt) Panipat refinery to 15 mt. The expansion, which has already been approved by the IOC board, will be completed in three years. The 2 mt naphtha cracker plant is also expected to be complete by the same time.

The total value of the petrochemicals project in Panipat is estimated at Rs 11,900 crore, significantly higher than the previous estimate of Rs 6,300 crore.

The naphtha plant will have a capacity to manufacture 8 lakh tonne per annum (tpa) of ethylene, 5.75 lakh tpa of propylene, 3.5 lakh tpa of linear low-density polyethylene, 3 lakh tpa of high-density polyethylene, 2 x 3,00,000 tonne of polypropylene and 2.5 lakh tonne of monoethylene glycol.

Last year, the company had expanded the capacity of the refinery from 6 mt to 12 mt and also commissioned the paraxylene and purified terephthalic acid (PxPTA) plant.

IOC has identified the petrochemicals business as a driver for growth and has drawn up an ambitious Rs 30,000 crore masterplan for the petrochemicals business. The plan includes development of world-class petrochemicals hubs in Panipat and Paradip.

IOC is also expanding the capacity of its Haldia refinery to 7.5 mt from the existing 6 mt at a cost of Rs 1,600 crore with technology upgrade to ensure higher crude cut at Haldia refinery.

The company is also considering putting up a hydrocracker facility at the Haldia complex. This would be IOC's fourth hydrocracker plant.

Hydrocrackers are used to break down the heavy distillates and convert them to more valuable lighter distillates like diesel. Typically, around 30 per cent of the distillates fall in the heavy distillates category.

In the past, the company has bought the technology from two US companies, Chevron and UOP.

IOC already has hydrocracker facilities at the Mathura and Panipat refineries. The 15 mt refinery coming up at Paradip will also incorporate a hydrocracker. The Rs 20,000-25,000 crore Paradip complex is expected to be commissioned by 2010.