Indian Oil to invest Rs610bn in Paradip petrochemical complex

MUMBAI (ICIS)–State-run Indian Oil Corp (IOC) will invest rupees (Rs) 610bn ($7.4bn) to build a downstream petrochemical complex at its Paradip refinery in the eastern Odisha state.

The project will be the company’s largest ever investment in a single location, the company said in a statement on 22 March.

The petrochemical complex will include a world-scale cracker unit along with downstream process units for producing polypropylene (PP), high density polyethylene (HDPE), linear low-density polyethylene (LLDPE) and polyvinyl chloride (PVC), IOC said.

“It [new project] shall also facilitate production of niche chemicals and petrochemicals like phenol and isopropyl alcohol (IPA),” it added.

Details on plant capacities and timelines for project completion were not provided.

Once commissioned, all these units will help provide the feedstock for the Petroleum, Chemical and Petrochemical Investment Region (PCPIR).

Paradip is one of the four approved PCPIRs in India, with the others being  Vishakhapatnam-Kakinada in Andhra Pradesh, Cuddalore-Nagapattinam in Tamil Nadu, and Dahej in Gujarat.

IOC has an existing 680,000 tonne/year polypropylene (PP) unit – comprising two 340,000 tonne/year lines – in Paradip.

Meanwhile, the company is currently building a 357,000 tonne/year monoethylene glycol (MEG) line and an integrated 800,000 tonne/year paraxylene (PX) unit and a 1.2m tonnes/year purified terephthalic acid (PTA) plant at the site.

The projects are also expected to help the growth of the plastic park in Paradip by providing necessary feedstock for key downstream industries like plastic, pharmaceuticals, agrochemical, paints, among others, IOC said.

Odisha is planned to house one of the six plastic parks planned by the Indian government across the country. The eastern state is also envisioned as a textile park site.

IOC’s projects will help with India’s import substitution and will significantly improve the company’s petrochemical intensity index, its chairman SM Vaidya said.

The company’s petrochemical intensity, which refers to the percentage of crude oil converted into chemicals, is targeted to more than double to 15% from  around 7% currently.

This would help cushion the impact of upstream crude market volatility, IOC said.

($1= Rs82.17)