Financial Daily from THE HINDU group of publications
Wednesday, Nov 16, 2005
Financial Daily from THE HINDU group of publications Wednesday, Nov 16, 2005 |
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Corporate
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Outlook Panipat, Haldia refineries to boost IOC margin Pratim Ranjan Bose
Kolkata , Nov 15 INDIAN OIL expects a major boost in its gross refining margin (GRM) beginning 2005-06 primarily from the expanded Panipat and Haldia refineries, which have a combined capacity of over 18 million tonnes. The company also hopes to maintain the margin at over $6 per barrel during the current fiscal. IOC recorded a GRM of $6.05 per barrel for the first six months of 2005-06. This was lower than the $7.15-a-barrel GRM registered during the same period in 2004-05. A company official said that the ongoing Rs 4,165-crore project for expansion of Panipat refinery from 6 million tonnes to 12 million tonnes capacity, coupled with process upgradation, would be commissioned by February-March 2006. The expanded refinery would use 60 per cent cheaper West Asia crude. The creation of lower-cost crude supply through the proposed Mundra-Kandla-Panipat pipeline would bolster Panipat's margin by an additional $ 2 per barrel. The refinery currently records a high GRM of $7 per barrel of crude following the completion of the Panipat - Rewari product pipeline. Meanwhile, work on the 700-km pipeline between Haldia and Paradip is on schedule and expected to be completed by March-April 2006. The project will sharply reduce cost of crude transportation to Haldia. The net positive impact on the margin is estimated to be $1 per barrel. Apart from the Haldia refinery, the 6-million tonnes Barauni refinery would also benefit from the pipeline Though it uses over 80 per cent heavy and sour crude, Haldia currently records a low GRM of $ 6 per barrel primarily due to high transportation cost of crude. IOC has already lined up Rs 1,600 crore investment for expanding the refinery capacity from 6 million tonnes to 7.5 million tonnes, as well as changing the process configuration. The project will be completed in 2009.
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