Cracker conundrum

Chennai Petroleum announced last week plans for a refinery and petrochemical complex at Ennore, Tamil Nadu. ICIS news reports that the petrochemical part of the project includes a 1.2m tonne/year cracker and derivatives units. A pre-feasibility study is underway and expected to be completed next month. The company hopes to complete the cracker by 2014-15.

Chennai Petroleum’s cracker joins a steadily growing project list, which at last count included eight crackers. The enthusiasm is easy to understand given the country’s ongoing economic transformation. But I suspect many of the projects will remain on paper for a long time to come.

I don’t dispute the demand growth calculations – India will certainly absorb greater volumes of all kinds of chemicals in the coming decade. But the projects environment is getting tricky. Feedstock cost and availability and infrastructure are the commonly touted hurdles. And then there are the growing protests against land acquisition.

It will require a great deal of commitment to see a project through, which I suspect will be in short supply.

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