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Our Bureau

The hydrocracker unit of CPCL, Manali which was commissioned in August 2004.

Chennai , March 16

CHENNAI Petroleum Corporation Ltd (CPCL) proposes to put up a Rs 1,200-crore polypropylene plant, the company's Managing Director, Mr S. V. Narasimhan, told journalists here today.

"It is an attractive investment," he said, basing his view on a preliminary feasibility report prepared by Engineers India Ltd.

CPCL produces propylene, the basic feedstock in the production of polypropylene, a plastic. The report has said that a 1,50,000 tonnes polypropylene plant was feasible. CPCL produces about 80,000 tonnes of propylene and could source the balance from Indian Oil Corporation, its parent company. CPCL would have to conduct a detailed feasibility report and then seek Government approval. Once approvals were obtained, the plant would take another four years to come up. CPCL had about 400 acres of land at Manali for this project.

CPCL also proposes to join Indian Oil Corporation in the 2.5-million-tonne liquefied natural gas (LNG) project at Ennore.

Mr Narasimhan said this when journalists visited the CPCL's new 3-million-tonne refinery. The refinery came up under the company's Rs 2,360.38-crore expansion project. The other elements of the project were a hydrocracker, a catalytic reformer unit and the revamp of the fluid catalytic cracking unit. The new plant raises the company's total refining capacity to 10.5 million tonnes a year, making it the biggest refiner in South India.

Thanks to declining interest rates and rising refining margins, CPCL was able to complete the project within the budgeted cost, Mr Narasimhan said. With the new plant, CPCL's annual production of LPG will increase from 1,80,000 tonnes to 4,00,000 tonnes. Petrol production will increase from 3,90,000 tonnes to 7,00,000 tonnes. The products will also meet the Bharat Stage-II norms and Euro-III norms.

Asked about the proposed power project with Neyveli Lignite Corporation, Mr Narasimhan said: "We are going slow" on that project. The reasons were that cost of fuel oil had gone up while the tariff was pegged at Rs 3 a unit, which would not be attractive for the State Electricity Board to buy.

Neyveli Lignite Corporation would get the project's feasibility report updated.

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