Land allotment delay by govt puts IOCL's Paradip petrochem unit in a fix

Land delay puts IOCL's petrochem units in Odisha

Indian Oil Corporation Ltd (IOCL) is upset with the Odisha government for delay in allotment of land contiguous to its 15 million tonnes per annum (mtpa) crude oil refinery at Paradip. The oil marketing company, in February 2017, had asked for an additional 2,290 acres of land to commission different units of its petrochemical complex where fresh investments could cross Rs 500 billion.

But close to a year of its online application, the land is yet to be alloted to IOCL. The company's chairman Sanjiv Singh has urged the state government to allot land on priority.

“Plans are afoot to implement a world scale PC-PTA plant at Paradip. Setting up a Pet Coke gasification project is also being conceptualized. These new projects would involve large investments and help plastic, as well as textile industries, grow in the region. However, these plans of IOCL require additional land as the existing land in the refinery has already been committed to projects under execution”, said a letter by IOCL chairman to Odisha's chief secretary Aditya Prasad Padhi.

“Without additional land, we are not in a position to firm up our plans and process with identified projects”, he added.

Odisha's industries secretary Sanjiv Chopra and CMD of Odisha Industrial Infrastructure Development Corporation (Idco), Sanjay Singh were not immediately available for a comment.

The oil major was provided over 3,300 acres of land for the crude oil refinery where it has already invested Rs 350 billion. The company has pledged to invest Rs 517.79 billion more. The crude oil refinery, petrochemical complex, and investment on different pipelines make IOCL the biggest investor in Odisha.

Apart from commissioning its 15 mtpa refinery, projects such as poly-propylene unit, mono ethylene glycol (MEG) project, BS-VI quality improvement project, Paradip-Hyderabad product pipeline, Paradip-Haldia pipeline, Dhamra-Paradip Natural Gas pipeline at various stages of executions.

The first petrochemical unit of IOCL — the polypropylene complex where IOCL is investing Rs 31.50 billion is under construction and is expected to be operational within one year. The oil marketing company has also got the in-principle approval of its board to set up a second unit — the mono ethylene glycol plant at a cost of Rs 38 billion.

Similarly, two projects, the purified terephthalic acid (PTA) plant, and pet coke gasification-based synthetic ethanol plant would together cost IOCL Rs 280 billion and are due to be commissioned by September 2021.