14 YEARS ON, PARADIP RE­FIN­ERY TO BE IN­AU­GU­RATED

REFINING MAR­GIN OF THE PLANT WILL BE HIGHER BY $6-7 PER BAR­REL OVER THE AV­ER­AGE REFINING MAR­GIN OF $10-12 BY IOCL AT PRESENT

Resource Digest - - NEWS -

For­mer prime min­is­ter Atal Bi­hari Va­j­payee laid the foun­da­tion stone of the pro­ject in May 2002 and the cur­rent Prime Min­is­ter, Naren­dra Modi, will in­au­gu­rate it on Fe­bru­ary 7. The 15-mil­lion-tonne Paradip re­fin­ery of In­dian Oil Cor­po­ra­tion (IOCL), the largest on the east­ern coast, has gone through lots of ups and downs to get to this stage. But, as it nears its com­mis­sion­ing date, IOCL is up­beat that the pro­ject equipped with su­pe­rior tech­nol­ogy to process high-sul­phur crude oil, which can be sourced cheap, will bring wind­fall in terms of higher refining mar­gins. The re­fin­ery has been built at a cost of Rs 34,555 crore. The refining mar­gin will be higher by $6-7 a bar­rel over the av­er­age refining mar­gin $10-12 earned by IOC at present. This is ex­pected to boost the bot­tom line of IOC as it would im­prove the over­all gross refining mar­gin (GRM) of the com­pany by $2-3 a bar­rel, said Ram­jee Ram, ex­ec­u­tive di­rec­tor (in-charge) of the re­fin­ery pro­ject at Paradip.

Though the re­fin­ery can process all types of crude oil sourced from the Gulf na­tions, Africa and South Amer­ica, it has no con­trol on the sup­ply of the feed as the crude is pro­cured by the cen­tral pro­cure­ment cell of IOC at Delhi, which de­cides the mix of crude to be sent to dif­fer­ent re­finer­ies op­er­ated by the com­pany. The re­fin­ery is equipped to pro­duce low-emis­sion Bs-iv-com­pli­ant mo­tor fuel, which puts it in an ad­van­ta­geous po­si­tion as the coun­try goes for stricter reg­u­la­tions on pol­lu­tion front. “We can even step it up to pro­duce Bs-vi-com­pli­ant au­to­mo­bile fuel with the ad­di­tion of few equip­ment. A study is on in this re­gard to as­cer­tain the mar­ket and in­vest­ment re­quired for this pur­pose,” said Ram.

The govern­ment, with an ob­jec­tive to check au­to­mo­bile pol­lu­tion, has set dead­lines for switch­ing over to BS-IV emis­sion norms by April 2016 and BS-VI emis­sion norms by 2020.

“It is not a prob­lem for us to pro­duce Bs-vi-com­pli­ant fuel right now; the au­to­mo­bile sec­tor has to first make the nec­es­sary changes in the en­gine to use this kind of fuel,” he added.

Paradip will be the first re­fin­ery un­der IOC to be in­te­grated with a petro­chem­i­cal com­plex. While the work on a polypropy­lene unit in­side the re­fin­ery com­plex has al­ready started, it in­tends to be­gin work soon on methyl, ethyl, gly­col plant, coke gasi­fi­ca­tion unit, paraxy­lene plant and pu­ri­fied tereph­thalic acid pro­ject. The ad­di­tional in­vest­ment on th­ese projects will be Rs 30,000-35,000 crore.

The re­fin­ery, which in­tends to at­tain 100 per cent ca­pac­ity in three years, will pro­duce liq­ue­fied pe­tro­leum gas, propy­lene, petrol, diesel, naptha, and pet coke, which will mainly cater to the east­ern and south­ern mar­kets. “Though our pri­or­ity will be the do­mes­tic mar­ket, de­pend­ing on the price ad­van­tage, some prod­ucts can be ex­ported tak­ing ad­van­tage of the re­fin­ery’s lo­ca­tion on the east­ern coast,” said Ram.

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