Our new refinery projects likely in West coast: Ashok
Country's biggest oil company Indian Oil Corporation Ltd (IOC) is looking at setting up a greenfield refinery on the West coast as part of its expansion plans, a top company official has said.
‘With the growth in the economy, we see there is a need for green field refinery by 2021-22. After setting up of Paradip Refinery in East coast, we are now looking at setting up of refinery in West coast region, for which we are looking for suitable state and place,’ Indian Oil Corporation Chairman B Ashok told reporters here.
The company is also the second largest petrochemical player having 19 per cent market share.
‘We have a 19 per cent market share and we are looking at expanding. We see plenty of opportunities and want to be a strong player,’ Ashok said.
IOC's Rs 34,555 crore state-of-the-art 15 million metric tonnes per annum (MMTPA) Paradip Refinery would be commissioned in phases from March 2015 onwards, Ashok said.
On cost escalation, Ashok said, the Paradip Refinery was envisaged originally at Rs 29,700 crore and has now been estimated at Rs 34,555 crore, which includes certain changes, with the addition of a new power plant.
The refinery is capable for processing a broad basket of crude oil grades, including cheaper high-sulphur heavy crudes, which would help the company improve its bottom-line, he said.
As part of its diversification plan, the company is setting up a polypropylene project having capacity of 680 KTA at Paradip. The INDMAX FCC Unit of 4.2 MMTPA capacity at Paradip, one of the major secondary processing units, is designed to operate in petrochemicals mode to maximise propylene/ethylene production.
On fall in crude oil prices, Ashok said indications are that prices are going to behave same way in the near term. Falling crude price is good for the country and good for customers, he said.
‘IOC's profits are under pressure but operationally we are improving. With the commissioning of Paradip Refinery, our position will be better,’ he said.
The company is expanding its portfolio in gas, petrochemicals and upstreams to improve its bottom-line, he said. Among new businesses, IOC currently has participating interest in 13 domestic and nine overseas blocks. These blocks are in different stages of development. The cumulative investment in E&P initiatives has been Rs 9,860 crore till date, but IOC is not going to be a major player in E&P, Ashok said. In the gas sector, IOC sold 3.22 MMT of R-LNG during 2013-2014, which constitutes a market share of 28 per cent in the domestic market. A pioneer in supplying 'LNG by Road' to customers not connected to pipeline networks, it includes transportation of LNG in cryogenic tankers by now. IOC plans to augment its 132-km Dadri-Panipat pipelines. A 5 MMTPA LNG re-gasification terminal project at Ennore in Tamil Nadu is under implementation.
IOC is also a consortium partner for implementation of 4,000 km of gas pipeline projects and is also a joint venture partner for city gas distribution in Agra and Lucknow. Another joint venture for city gas distribution is also being implemented for Lucknow and Chandigarh.
In the petrochemicals sector, IOC is now the No 2 player in the country. The petrochemical plants of IOC includes LAB at Gujarat Refinery having capacity of 120 TMTPA; PTA at Panipat refinery 553 TMTPA; and Naphtha Cracker at Panipat having Polyethylene capacity of 650 TMTPA. The total investment on these plants is over Rs 20,800 crore, Ashok said. IOC has been aggressively automating its retail outlets with a view to optimising the benefits for customers, dealers and the Corporation. About 6,537 retail outlets have been automated till date and the Corporation has aggressive plans to cover the entire network.