Indian Oil Corporation (IOC)'s subsidiary Chennai Petroleum Corporation Ltd (CPCL) is planning to invest around Rs 760 crore during the current fiscal.
CPCL managing director AS Basu said here, 50 per cent of the Rs 730-760 crore would go for resid project and crude oil pipeline project connecting Chennai port with company's refinery at Manali, north of Chennai.
The resid project was supposed to go on stream by 2013 end, but it would be delayed as it is awaiting environment ministry's clearance. "From the time we get environment clearance, it will take 30 months to commission the project."
The project will help the company improve its gross refinery margin by $1-2 per barrel, said D Lilly, director - finance, CPCL.
Asked whether the delay would increase the cost of the project, Lilly said, "it (escalation) may not be their now since the economic slowdown still continues".
Meanwhile, Basu said the company was the process of finalising its proposed brownfield capacity of around 6 million tonnes. “At present, India has got surplus refining capacity. While the production demand is 148 mt per annum, refining capacity in the country is 213 mt. With the surplus situation, we are now looking at how the proposed brownfield expansion will be profitable.” The proposed 6 mt expansion may require Rs 1,2000-1,3000 crore investment.
Lily said funding for the expansion was not a constrain. The company would look at various modes to raise money including ECBs, and syndicated and domestic loans.
