IOC plans $2.4b spend to make ethanol for blend­ing

The Pak Banker - - COMPANIES/BOSS -

MUM­BAI: In­dian Oil Corp., the na­tion's big­gest re­finer, plans to spend Rs16,000 crore ($2.4 bil­lion) to build a plant for pro­duc­ing syn­thetic ethanol as it seeks to se­cure sup­plies of the bio­fuel to meet manda­tory blend­ing norms.

The state-run com­pany is study­ing the pro­ject to pro­duce 1 mil­lion met­ric tons of ethanol an­nu­ally for blend­ing with ga­so­line, S. Mi­tra, ex­ec­u­tive di­rec­tor at In­dian Oil, said in an in­ter­view. In­dian Oil plans to seek in­vest­ment ap­proval from its board next year, af­ter which the fa­cil­ity, to be lo­cated at Paradip in eastern In­dia, will take about four years to com­plete, he said. The re­finer will part­ner with Dal­las-based Ce­lanese Corp. for the ethanol pro­ject, which will use petroleum coke as feed­stock from In­dian Oil's two re­finer­ies in the re­gion, Mi­tra said.

In­dia is fac­ing a sup­ply short­age of the bio­fuel, hin­der­ing plans to achieve manda­tory 5% blend­ing, oil min­is­ter Dhar­men­dra Prad­han said ear­lier this month. In De­cem­ber, the fed­eral gov­ern­ment al­lowed ethanol pro­duc­tion from non-food feed­stock in­clud­ing petro­chem­i­cals to im­prove avail­abil­ity. In­dian Oil and two other state-run re­fin­ers, Hin­dus­tan Petroleum Corp. and Bharat Petroleum Corp., are seek­ing 2.66 bil­lion liters of ethanol in the 12 months to 30 Novem­ber 2016. The sup­ply short­age is prompt­ing In­dian Oil, which would need nearly half of the pro­jected re­quire­ment, to con­sider pro­duc­ing its own ethanol, Mi­tra said.

In­dian Oil, which also runs the big­gest net­work of fuel sta­tions in the coun­try, bought about 186 mil­lion liters of ethanol for blend­ing through the year to 31 March. In In­dia, ethanol is pri­mar­ily pro­duced from mo­lasses, a byprod­uct of sugar mak­ing. Mo­lasses out­put de­pends on the su­gar­cane crop, which varies each year.

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