Indian Oil eyes West coast for new refinery project

Country's biggest oil company IOC is looking at setting up a greenfield refinery on the West coast as part of its expansion plans, a top company official has said.

"With the growth in the economy, we see there is a need for green field refinery by 2021-22. After setting up of of Paradip Refinery in East coast, we are now looking at setting up a refinery in West coast region, for which we are looking for suitable state and place," Indian Oil Corporation Chairman B Ashok told reporters here.

The company is also the second largest petrochemical player having 19 per cent market share.

"We have a 19 per cent market share and we are looking at expanding. We see plenty of opportunities and want to be a strong player," Ashok said.

IOC's Rs 34,555 crore state-of-the-art 15 million metric tonnes per annum (MMTPA) Paradip Refinery would be commissioned in phases from March 2015 onwards, Ashok said.

On cost escalation, Ashok said, the Paradip Refinery was envisaged originally at Rs 29,700 crore and has now been estimated at Rs 34,555 crore, which includes certain changes, with the addition of a new power plant.

The refinery is capable for processing a broad basket of crude oil grades, including cheaper high-sulphur heavy crudes, which would help the company improve its bottom-line, he said.

As part of its diversification plan, the company is setting up a polypropylene project having capacity of 680 KTA at Paradip.

The INDMAX FCC Unit of 4.2 MMTPA capacity at Paradip, one of the major secondary processing units, is designed to operate in petrochemicals mode to maximise propylene/ethylene production.

The unit would produce 700 KTA of propylene. Based on the availability of propylene, a poly-propylene plant of 700 KTA capacity is expected to be commissioned by 2017-18, with an estimated capex of Rs 3,150 crore, he said, adding that the company sees a lot of potential in polymer usage.

On fall in crude oil prices, Ashok said indications are that prices are going to behave same way in the near term. Falling crude price is good for the country and good for customers, he said.

"IOC's profits are under pressure but operationally we are improving. With the commissioning of Paradip Refinery, our position will be better," he said.

The company is expanding its portfolio in gas, petrochemicals and upstreams to improve its bottom-line, he said.