The Hindu Business Line : Indian Oil gears up for Paradip refinery work

Kolkata, June 29Indian Oil will initiate the process of appointing the project management contractor for setting up the Paradip refinery, early next month.

The company has already appointed SBI Capital for tying up finances for the proposed grassroot refinery at an estimated cost of Rs 30,000 crore.

“We are expecting SBI caps to tie-up finances in next couple of weeks so as to seek the final board approval on project expenditure tentatively within next two months,” a company source told Business Line.

“In the meantime, banking on the preliminary approval by the board, we will float the tender for appointing the PMC which is the first step towards project implementation,” the source said, adding, the company has already identified the technology for setting up the refinery.

In view of phenomenal increase in the project costs during the last two years, IOC has recently changed its original plan to set up an integrated-refining-cum petrochemicals complex at Paradip at a cost of Rs 25,000 crore.

According to previous estimate, IOC planned to set up an integrated refining and petrochemical complex at a total investment of Rs 25,000 crore.

In the changed scenario, the company now proposes to set up the refinery alone in the first phase.

Meanwhile, a relatively higher volatility in product prices–especially that of diesel and aviation turbine fuel (ATF) – in the international market helped the company in posting a record refining margin during the first quarter of 2008-09.

“We have witnessed historic increases in margin in May and June,” a company source said.

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