19 March 2012 02:48 [Source: ICIS news]
GURGAON (ICIS)--Indian Oil has earmarked an investment of Rs150bn ($3bn) over the next five years to boost its petrochemicals production, senior executives of the Indian major said late on Friday.
“We are committed to investing more in petrochemicals; we are looking at adding value to every hydrocarbon molecule. The plan is to utilise stranded streams of propylene from our refineries and add value to streams from the cracker,” said A M K Sinha, the company’s director of planning and business development.
He was speaking on the sidelines of the Petrochemical Conclave organized by the company on 16 March.
The state-owned refining and petrochemical company will be focusing on adding value to the propylene streams at its refineries at Vadodara, Mathura and Barauni.
At Vadodara, the company plans to set up plants for acrylic acid (AA), acrylates and oxo-alcohols.
“We are in talks for a joint venture with a leading European producer. We plan to complete a study by April/May,” said Sidhartha Mitra, the firm’s executive director for petrochemicals.
“We are looking at 160,000 tonnes/year of crude acrylic acid, 210,000 tonnes/year of butyl acrylate [butac], 60,000 tonnes/year of acrylic acid and 130,000-140,000 tonnes/year of 2-ethylhexanol [2-EH],” he added.
“A feasibility study has been done. We are waiting for test runs to be completed at the fluid catalytic cracking [FCC] unit as propylene capacity needs to be augmented. We will then go for board clearance,” said Mitra.
The company was initially looking at adding a polycarbonate (PC) unit to the phenolics complex, but decided not to pursue it as the market outlook is uncertain, he added.
Plans for a polypropylene (PP) facility downstream of a refinery that is currently under construction at Paradip, Orissa, have also been revived. The refinery is due for completion in the first half of 2013.
For the five years beyond 2017, Indian Oil has targeted an investment of Rs300bn in petrochemicals.
Projects have yet to be firmed up, but this is the direction that the company intends to take, said Sinha.
A new cracker, as well as an expansion of the Panipat cracker, are likely during this period.
The Panipat cracker, which was commissioned in 2010, has been facing technical issues which have prevented the company from running it at full operating rate. A shutdown has been scheduled for April to resolve these issues.
“We hope to stabilise operations in 2012 and carry out capacity test runs. We will then take up [debottlenecking] with the licensors,” said Mitra.
The company’s petrochemical revenues are currently at Rs120bn, which is around 5% of its total turnover.
“After the investments, we are targeting revenue of Rs300bn by 2022, which would be close to 10% of Indian Oil’s turnover. We aim to produce 12m tonnes of petrochemicals by then,” Sinha said.
The company ambitions for a bigger role in petrochemicals would be further boosted if it can expand its 9.62% stake in financially-troubled Haldia Petrochemicals Ltd (HPL).
“We are watching the situation carefully. We have reiterated our interest in [HPL] and are open to dialogue whenever the state government wants to,” said Sinha.
HPL’s two principal shareholders, The Chatterjee Group (TCG) (44.21% interest) and the West Bengal state government (43.29%), are in a tussle over the ownership of the company.
The West Bengal government is insisting on auctioning its entire holding of 155m shares to seek higher valuations as it exits HPL.
However, TCG wants complete control over HPL through a transfer of the state government’s stake as per a March 2002 agreement between the two shareholders.
Additional reporting by Prema Viswanathan
($1 = Rs50.19)
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