Targets 100-million-tonne capacity by 2021-22
Indian Oil Corporation Ltd (IndianOil) on Tuesday said it is looking to set up a 15-million-tonne greenfield refinery on the country’s West coast.
Along with the exercise of ramping up its existing refineries, the new unit will take the public sector company’s total refining capacity to 100 million tonnes by 2021-22, said R.K. Ghosh, Director (Refineries), IndianOil.
Currently, IndianOil has a refining capacity of 65.7 million tonnes a year. India has a total refining capacity of 215 million tonnes a year.
Going by rough estimates, touching the 100-million-tonne capacity would require the company to spend Rs 60,000-70,000 crore during the 12th and 13th Five-Year Plan periods.
The company has engaged Engineers India Limited (EIL) to undertake a preliminary study for the project on the West Coast. EIL is likely to submit its report by December-end. After this, a detailed feasibility study will be commissioned, Ghosh told media-persons.
In addition, IndianOil is gearing to push up capacity and upgrade technology at its refineries in Panipat, Mathura and Koyali.
“We are looking at revamping the existing refineries because it is economical. Revamping costs Rs 1,500 crore for every million tonnes, against Rs 2,000 crore for a greenfield project,” Ghosh explained.
IndianOil plans to integrate its refineries with petrochemical complexes. At present, Panipat has such an integrated set-up.
Ghosh said that sourcing of crude oil is going to be tough in the future. The gross refining margins (GRMs) are under stress because crude prices are rallying northwards but crack spreads are not. The crack spread is the cost difference between crude oil and refined products.
IndianOil is trying to expand its crude basket by importing heavy crude such as Latin American Maya. “We will use high-acid crude from April. This is because these crudes are cheaper. Currently, we cannot use 100 per cent heavy crude as transportation is a problem,” Ghosh said. The new refinery at Paradip is likely to process 40 per cent of heavy crude such as Maya and the remaining would be lighter varieties from Kuwait.
The 15 mtpa project at Paradip will be ready by the end of next year and there may be a 10 per cent cost escalation from the planned expenditure of Rs 29,700 crore, Ghosh added.