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Pratim Ranjan Bose

Kolkata , July 26

INDIAN Oil is planning to split the petrochem part of the proposed 15-million-tonne integrated refining and petrochemicals complex at Paradip in Orissa so that it can be implemented in two phases. This decision is likely to affect the configuration of the refinery.

Sources said that in the first phase, the company was considering commissioning the fluid catalytic cracking (FCC) route to produce polypropylene and polystyrene and then back it up with a naphtha cracker plant later to produce a wider range of products, including mono ethylene glycol (MEG).

Consequently, the phase-I cost would be lower by around Rs 6,000 crore, the initial estimate for the entire project being Rs 20,700 crore.

Though no reason was cited by company sources for splitting the project into two parts, it is well known that Indian Oil's internal accruals have taken a knock in recent times following the sharp increase in crude oil prices and the Government's reluctance to permit full recovery of costs on petroleum products such as kerosene, diesel and LPG.

Indian Oil has also decided to implement the project on its own rather than float a special purpose vehicle and bring in an equity partner.

The commissioning of the Paradip project is expected to be over in 2009.

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