Panipat Refinery capacity to be enhanced by 25%

IOC to raise Panipat capacity by 25%
Business Standard, New Delhi, May 02, 2010


IndianOil, the country's biggest of marketing company, will expand capacity of its Panipat refinery by 25 per cent to 15 million tonnes (mt) from October. This will be done at a cost of Rs 1,000 crore. At present, IOC has a refining capacity of 51.2 mt. After the expansion, this will rise to around 54 mt.

"Most modifications have been done. A shutdown will be done during the lean month of August to expand the capacity from 12 mt to 15 mt. The shutdown period will be about one-and-a-half month at the crude distillation unit and the coker plant," Chairman B M Bansal told reporters at a company event in Panipat.

Bansal today flagged the first set of polymers from the company's recently inaugurated naphtha cracker plant at Panipat, marking IOC's entry into the polymer business. IOC's competitor in oil refining and marketing, Reliance Industries, is the largest domestic player in polymer with an estimated market snare of 75 per cent. IOC has been making efforts to diversify into petrochemicals from the liquid fuel business, where its margins remain under pressure as it is required to sell products such as petroleum, diesel, kerosene and LPG at government-determined prices.

IOC's naphtha cracker plant, built at a cost of Rs 14,400 crore, is the country's biggest operating cracker plant. The company will source about 2-mt naphtha, the primary feedstock for the plant, from its refineries at Koyali, Panipat and Mathura.

At present, the plant is operating at 50-60 per cent of its capacity of 850,000 tonnes. The company's naphtha export wills come down gradually as its internal naphtha consumption goes up. "When the plant becomes fully operational in the next two-three months, our naphtha exports will come down by 65-70 per cent from the current 2.5 mt," said B N Bankapur, director (refineries).

The naphtha cracker plant comprises downstream units for producing ethylene, propylene, benzene and associated products. These find application in manufacture of films, toys, tanks, pipes, furniture, auto components and electrical equipment.