 "IOCL aims to run Paradip refinery at 100% capacity from FY17")
"The Paradip refinery would commence continuous operations in one to two months. Most of the units of the refinery have been commissioned. We have invested around Rs 35,000 crore on the refinery and aim to run it at full capacity from the next fiscal", said Sanjiv Singh, director (refineries), IOCL.
He said, the refinery would roll out BS-IV compliant products from Day one and is also capable of producing BS-VI products. Oil marketing PSUs are expected to pump in Rs 28750 crore for switching over to BS-VI auto fuels by April 1, 2020. BS-IV and BS-VI auto fuels have far lower sulphur content compared to BS-III levels.
The Paradip refinery is designed for the domestic market though it is also capable of exporting petroleum products, Singh said. The refinery is set to be dedicated to the nation by Prime Minister Narendra Modi on February 7.
"We hope that the entire volume of petroleum products produced at the Paradip refinery would be consumed domestically", he added.
On the polypropylene complex, Singh said work has already taken off and it is poised for commissioning by the end of 2017. The petrochemical complex would consist of other units like glycol unit, PTA plant and petcoke gasification based synthetic ethanol. Investment on the whole petrochemical complex is pegged at about Rs 31,000 crore.
Quoting a study, Singh said the country was in a position of oil refining surplus. Against the estimated consumption of 165 million tonne of petroleum products, the refining capacity was 230 million tonne and this included the export oriented refineries owned by Reliance, said he.
IOCL's Paradeep refinery has started despatch of petroleum products from November last year. Forty to 50 per cent of our products would be transported through pipelines, the IOCL official said.
Claiming the Paradeep refinery to be the most modern refinery designed with the best of technologies, he said the refinery can refine all varieties of crude oil. The Paradeep refinery has unique INDMAX (Indane Maximization) technology with 4.17 million tonne capacity capable of delivering up to 44 per cent LPG.
The Paradeep refinery is capable of processing 100 per cent high sulphur, including 40 per cent heavy crude oil of low cost. The refinery would churn out a wide gamut of petroleum products like petrol, diesel, kerosene, aviation turbine fuel, propylene, sulphur and petroleum coke.
Asked on refining margin of the refinery, Singh said, "Refining is a low margin business as product prices are governed by crude oil prices. There were months when we had negative margins. Margins would depend on crude oil prices."
Commenting on VAT deferment and other tax sops extended to the Paradeep refinery, he said, "There is no dispute with the Odisha government on tax issues. The state government is a partner in the refinery project. The tax sops were essential for commercial viability of the project."
The state government had offered waiver on VAT to the Paradeep refinery for 11 years. Each year, the state government would grapple with a loss in the range of Rs 1500-2000 crore due to VAT deferment.
The Paradeep refinery product mix would consist of 37.5 per cent high speed diesel, 25.3 per cent motor spirits, 13.1 per cent ATF, 5.2 per cent propylene+LPG, 8.1 per cent petroleum coke and 1.8 per cent sulphur. The products would be predominantly consumed in the domestic market except few quantities of motor spirits which would be exported.
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