Indian Oil’s petrochemical capacity to more than triple by 2030

MUMBAI (ICIS)–Indian Oil Corp (IOC) plans to beef up its petrochemical production capacity to 14m tonnes/year by 2030 which will increase the state-owned company’s petrochemical intensity index (PII) to 15%, nearly triple its current level, company chair SM Vaidya said.

• Total petrochemical investments to reach Rs1.2 trillion
• Domestic industry projected to grow at 8-10% over the next few years
• Local demand estimated to hit $1 trillion by 2040

Petrochemical projects worth Indian rupees (Rs) 300 billion ($3.6 billion) are under various stages of implementation, while feasibility studies are ongoing on projects worth Rs900 billion, based on IOC’s annual report for the fiscal year ending March 2024.

The company’s current petrochemical production capacity stands at 4.28 million tonnes/year, based on its annual report for the fiscal year ending March 2024.

IOC’s PII refers to the percentage of crude oil that is directly converted into chemicals.

“We are integrating petrochemicals into our refining operations,” IOC chairman SM Vaidya said at the company’s annual general meeting on 9 August.

“This oil-to-chemical approach will enrich our value chain, meet rising petrochemical demand, reduce import reliance, and insulate the bottom line from the impacts of oil price fluctuations,” he said.

By 2026, its refining capacity will have increased by more than 25% from the current 70.3 million tonnes/year to 87.9 million tonnes/year, Vaidya said at  IOC’s annual general meeting on 9 August.

By the end of the decade, IOC expects its refining capacity to be 107.4 million tonnes/year, according to the annual report released on 18 July.

“In 2023-24, we successfully commissioned the first phase of naphtha cracker expansion and paraxylene-purified terephthalic acid (PX-PTA) revamp project in Panipat and an ethylene glycol plant at Paradip. These have propelled our PII to 6.1%,” Vaidya said.

In November 2023, IOC increased the capacity at the naphtha cracker at its Panipat refinery complex from 857,000 tonnes/year to 947,000 tonnes/year.

Following the PX-PTA revamp at its Panipat refinery, IOC has increased its PX production to 460,000 tonnes/year and PTA output to 700,000 tonnes/year, as per the company website.

In March 2024, the company inaugurated its 357,000 tonne/year monoethylene glycol (MEG) project at its Paradip refinery complex.

PETROCHEMICAL PROJECT PIPELINE
Indian Oil plans to commission a 150,000 tonne/year butyl acrylate plant at its Gujarat refinery in the current financial year 2024-25.

One of the company’s ambitious petrochemical projects include the mega complex at Paradip in eastern Odisha state, Vaidya said, noting that the Rs610 billion project is IOC’s “largest ever investment at a single location”.

The petrochemical complex will include a world-scale 1.5 milion tonne/year naphtha cracker unit along with downstream process units for producing polypropylene (PP), high density polyethylene (HDPE), linear low-density polyethylene (LLDPE) and polyvinyl chloride (PVC).

The Paradip petrochemical project is currently in implementation stage and the company expects to commission it by August 2029, IOC said in its annual report released on 18 July.

As part of its future expansions, IOC expects to begin operations at the 200,000 tonne/year PP plant at its Barauni refinery and 500,000 tonne/year PP line at its Gujarat refinery before end-March 2026, based on the company’s annual report.

IOC has also enhanced its lube oil base stocks (LOBS) capacity at its Haldia complex and is setting up new plants at its Gujarat and Panipat refineries, Vaidya said, adding, “we aim to increase the capacity from 730,000 tonnes/year to 1.5 million tonnes/year”.

The company expects to commission the 60,000 tonnes/year polybutadiene rubber (PBR) plant at its Panipat refinery by March 2025 as per the annual report.

These planned expansions by IOC will help meet the rising petrochemical demand in the country, IOC stated in its latest annual report.

The domestic petrochemical industry is “poised for substantial growth, driven by India’s sturdy macro fundamentals, population expansion and presently low per capita polymer consumption,” it said.

India’s overall petrochemical demand is projected to nearly triple by 2040, with the industry’s value expected to reach the $1 trillion mark, said Indian minister for petroleum and natural gas Hardeep Singh Pur in a presentation at the Asia Petrochemical Industry Conference (APIC) in May 2023.

Focus article by Priya Jestin

($1 = Rs83.91)

Thumbnail image: An Indian Oil petrol pump in Kolkata, 17 January 2022. (By Indranil Aditya/NurPhoto/Shutterstock)