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The Board of privatisation-bound Bharat Petroleum Corporation Ltd (BPCL) is meeting in Srinagar on Thursday and Friday in a rare offsite meeting, which apart from discussing some key investment plans held up due to the disinvestment process, will also be the last Board sitting of the outgoing Director of Finance N Vijayagopal.
Vijayagopal will superannuate from the company on July 31.
BPCL has picked the summer capital of the Union Territory of Jammu and Kashmir for the board meet as the government looks to promote tourism in the wake of re-constitution of the former State of Jammu and Kashmir into two Union Territories - Jammu and Kashmir and Ladakh - from October 2019.
It will be far from a fun trip for the board members.
The board is expected to discuss the fate of the ₹11,130 specialty petrochemicals plant planned at Kochi refinery for producing polyols/propylene glycol/mono ethylene glycol, which has landed in uncertainty due to the on-going privatisation process, multiple sources briefed on the plan said.
Petrochemicals
Post commissioning of the Integrated Refinery Expansion Project (IREP), 500 KTPA (Thousand Metric Tonnes per Annum) of polymer grade propylene is available from Petro Fluid Catalytic Cracking Unit (PFCCU) at Kochi, for utilisation as petrochemical feedstock.
In the refining business, the availability of petrochemicals in the product portfolio hedges against drop in price/demand of fuels. Besides, integration of refining and petrochemicals can lead to better profit margins.
The recently commissioned Propylene Derivatives Petrochemical Project (PDPP) will utilise 250 KTPA of propylene for manufacture of niche/specialty petrochemicals such as acrylic acid, oxo alcohol and acrylates that are used in paints, coatings, adhesives and solvents.
BPCL had planned to produce value added petrochemicals such as polyols from the balance 250 KTPA of propylene and available ethylene feedstock from off-gases.
The polyols plant will be erected within Kochi refinery on 170 acres acquired from FACT Ltd.
Kinfra park
Using products from the PDPP and polyol plants as raw materials, the Kerala Industrial Infrastructure Development Corporation (Kinfra) has also planned a petrochemical park spread over 481 acres of land acquired from FACT Ltd to facilitate small scale industries in making products.
Kerala government reckons that the polyols project of BPCL and the petrochemical park planned by Kinfra will be in jeopardy when the ‘maharatna’ oil PSU is privatised.
“The planned petrochemical park is a big project for the development of Kerala. The fate of the project will be uncertain after BPCL is privatised,” said a Kerala government official. The State government feels that the new private owner of BPCL may also not be keen on supplying the products from the polyols plant to the petrochemicals park.
To overcome the uncertainty over raw materials, the Kerala government has informed BPCL that it was keen on signing a long-term agreement that allows “preferential supply” of products from the PDPP and polyol plants to the petrochemical park to make it a reality, the official said.
A spokesman for BPCL had denied “consideration of any outside venue for the board meet” when contacted by BusinessLine on July 19 seeking comments.
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