IOC plans to ex­pand Paradip re­fin­ery ca­pac­ity by 3-4 MT

Resource Digest - - CONTENT -

With the dis­pute be­tween the Odisha gov­ern­ment and In­dian Oil Corp (IOC) over the value-added tax (VAT) be­ing re­solved, the oil mar­ket­ing firm has firmed up plans to in­crease its in­vest­ment in the state in­clud­ing ex­pan­sion of the re­fin­ing ca­pac­ity in Paradip by 3-4 mil­lion tonne (MT) per an­num. “Very soon we may be eval­u­at­ing re­fin­ery ex­pan­sion in Paradip. It is a green­field 15 MT plant and we in­tend to ex­pand by 3-4 MT,” said San­jiv Singh, chair­man of IOC, adding that the com­pany has mas­sive plans for fur­ther in­vest­ment in the state. IOC is in­vest­ing Rs 50,000 crore in Odisha. This in­cludes the Rs 5,000 crore Dhamra LNG ter­mi­nal in which IOC will have 40% eq­uity, though it has not yet been firmed up. Oth­ers in the project in­clude GAIL (In­dia) and Adani En­ter­prises. “We are build­ing a polypropy­lene plant for which an in­vest­ment ap­proval of Rs 4,000 crore is likely shortly. Apart from some other smaller in­vest­ments, BS VI project will re­quire Rs 4,500 crore and we are look­ing at other petro­chem­i­cal op­tions which will be more than `8,000 crore. All these are linked with the re­fin­ery,” said Singh. The state gov­ern­ment has al­ready ac­corded Paradip the petroleum, chem­i­cals and petro­chem­i­cals in­dus­trial re­gion (PCPIR) sta­tus. Last week, IOC paid Rs 2,935 crore to the Odisha gov­ern­ment as part of the set­tle­ment to let go some of the tax in­cen­tives agreed upon in 2004. The tax amount was paid for the pe­riod of Novem­ber 2015 (when the pant was com­mis­sioned) to July 2017. In re­turn, the state gov­ern­ment has agreed to pro­vide Rs 700 crore in­ter­est-free loan per an­num for 15 years to the oil com­pany to com­pen­sate for the loss of with­draw­ing tax in­cen­tive for 11-year de­fer­ment on pay­ment of tax on prod­ucts made at the Paradip re­fin­ery and sold within the state. Though the com­pany had sought Rs 1,000 crore in­ter­est-free loan per an­num, Singh said the cur­rent ne­go­ti­ated ar­range­ment is com­pa­ra­ble with what re­cent projects have been of­fered.

The com­pany ex­pects that with a num­ber of fa­cil­i­ties, in­clud­ing a plas­tic park which is al­ready un­der de­vel­op­ment, be­ing set up in Paradip, var­i­ous petro­chem­i­cal down­stream in­dus­tries should come up in the re­gion. “We will be mak­ing MEG (mo­noethy­lene gly­col) in Paradip while PTA (pu­ri­fied tereph­thalic acid) is be­ing made by Hal­dia Petro­chem­i­cal and Mit­shu­bishi plant, and these two are the raw ma­te­ri­als for syn­thetic yarn and the tex­tile in­dus­try. So these pro­vide tremen­dous syn­ergy to go for such ex­pan­sions in the east­ern part of the coun­try,” Singh said.

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