IOC to set up Rs 11,000 cr hub

Ties up with Haryana to set up petrochem project at Panipat.

Indian Oil Corporation is setting up a Rs 11,000-crore "petrochemical hub" at Panipat, Haryana. The project will use naphtha as feedstock.

It will comprise associated units and downstream polymer/chemical units like HDPE, polypropylene and MEG. The feasibility of setting up a PET plant is also being studied.

The feedstock available from IndianOil's petrochemical projects can also nurture various downstream industries such as polyester staple fibre, polyester filament yarn, partially oriented yarn and polyethylene terephthatate, used as ingredients for manufacturing textiles and carpets.

IndianOil today signed an MoU with the Haryana State Industrial Development Corporation to form a special purpose vehicle to develop the hub. IndianOil, HSIDC and private developers will invest in the equity of the SPV.

"The equity structure has not been finalised yet. IndianOil will appoint a consultant for working out the structure," company sources said.

HSIDC will acquire 5,000 acres of land for the hub and will be responsible for all civic amenities. HSIDC has already initiated the acquisition process for 1,000 acres for the first phase of the project to be completed by 2009. The remaining 4,000 acres will be acquired after that.

With an investment of around Rs 15, 000 crore in petrochemicals and end-products, downstream industries are likely to generate an annual turnover of about Rs 12,500 crore at the complex.

Speaking on the occasion, Sarthak Behuria, Chairman of IOC, said, "The project of a world-class hub will cater to the requirements of the northern region as well as other regions. The project is a cornerstone for big-time entry into petrochemicals, a new growth area for IOC. The vision is to develop a world-class hub, as good as Jurong Island of Singapore."

A major source of raw material for this project will be captive naphtha generated from IOC's refineries in Panipat, Mathura and Gujarat.