Full throttle

New Delhi, March 30: Giving a big push to the proposed refinery at Paradip in Orissa, the Indian Oil board has recently cleared the proposal with a scaled-up project size. Initially the plan was to set up a 9-million-tonne refinery. But the board of the public sector oil retailer has now decided to set up a grassroots refinery-cum-petrochemicals project with an annual capacity of 15 million tonnes.

While the total investment could work out to around Rs 25,000 crore, the Indian Oil board has sanctioned an initial expenditure of Rs 1,100 crore for this year.

The refinery-cum-petrochemicals complex will produce paraxylene, polypropylene and styrene. Indian Oil will also build a product pipeline from the refinery to Ranchi.

The initial expenditure will be on technology selection, basic engineering design and site development.

To feed its refineries at Haldia and Barauni, Indian Oil has already installed a large oil terminal along with a single-point mooring terminal, to handle very large crude carriers, on the coast. The same terminal will be expanded to supply crude to the Paradip refinery as well. The Paradip-Haldia pipeline is also nearing completion. The land, over 3000 acres, for the project was acquired by Indian Oil a few years ago and had been developed by dredging and filling. Approach roads and bridges have also been constructed.

The contracts for the remaining infrastructure facilities are now being awarded to make the site ready so that project construction can begin within a year.

The IOC board’s decision to scale up the project size is prompted by the demand for fuels and petrochemical products in the domestic and export markets. Petrochemical facilities have been added to the project so that the surplus naphtha can be used for value addition.

Plans for the installation of a naphtha cracker along with polymer units at the site are being developed simultaneously. However, these will be implemented in the second phase.

The Orissa government had earlier given a package of incentives, including sales tax deferment for 11 years, for the refinery project.

Paradip, which has a fully developed port capable of handling large volumes of bulk cargo and two fertiliser units, promises to become one of the big industrial hubs of the country with the implementation of this mega refinery project.