The Hindu Business Line : IOC may upgrade, expand Barauni, Mathura refineries

Kolkata May 21 After Panipat, Koyali and Haldia, IndianOil has set its sight on upgradation-expansion of Barauni (six million tonnes) and Mathura refineries (mt) in Bihar and Uttar Pradesh respectively.

Set up in 1964 for use of light sweet Assam crude, the six-mt Barauni refinery is today run on low sulphur Nigerian crude resulting in high operational cost. Sweet light Nigerian crude is generally costlier by $3-4 a barrel over and above the heavy sour Middle East crude.

"We are planning a low-cost select process upgradation requiring an investment of Rs 1,000-1,500 crore so that the refinery can use 40-50 per cent of high sulphur crude. This will enhance the refining margin by $2-3 a barrel," a senior company official said.

Feasibility report

IOC has already carried out a preliminary study in this regard and is hopeful to approach the board with a feasibility report in the next six months.

Mathura refinery is currently operating at 120 per cent above the eight-mt capacity. IOC is considering setting up a coker unit to replace the production of black oil and improve the refining margin.

However, the biggest stumbling block before any such investment plan is the environmental concerns over the impact of industrial pollution on the Taj Mahal. Accordingly, the company may take a view of the Union Ministry of Environment and Forests before launching the feasibility study.

Panipat, Koyali & Haldia

IOC is currently commissioning a Rs 23,000-crore investment plan at Koyali refinery in Gujarat, Panipat in Uttar Pradesh and Haldia in West Bengal.

The Rs 5,693-crore project at the 13.7-mt Koyali refinery will replace black oil production, increase yield of distillates by seven to eight per cent, improve product quality to Euro-IV. Use of high sulphur imported crude will move up to 70 per cent. The project will be completed in January 2010.

The Rs 806-crore capacity expansion of Panipat refinery (from 12 to 15 mt) is scheduled to be completed in December 2008. The slated commissioning of the Panipat petrochemicals complex (Rs 14,439 crore) in November 2009 is progressing three to four months ahead of schedule.

The Rs 2,869-crore investment in Haldia refinery is slated to be complete in December 2009. Apart from enhancing capacities from six to 7.5 mt and improvement in product quality as well as yield, the project envisages usage of 90 per cent cheaper crude.

Paradip refinery

Commissioning of the 15 mt Paradip refinery-cum-petrochem is expected to begin in 2008 following submission of the detailed feasibility report, including cost estimates by Foster Wheeler. Currently, IOC is creating project logistics like roads and township in Paradip.