Another one bites the dust?

Yet another project appears to be fallen through. This time it is Chennai Petroleum Corp’s (CPCL) refining and petrochemicals venture at Ennore in Tamil Nadu.

Indian Oil Corp’s (IOC) chairman Sarthuk Behuria said in a press conference yesterday that the project may never come up as the country already had surplus refining capacity. CPCL is a subsidiary of IOC.

The Ennore project has been in the pipeline for nearly three years and efforts were underway to acquire land. Engineers India Ltd (EIL) had carried out a pre-feasibility study on the project which included a 1.2m tonnes/year cracker and an aromatics complex both of which were slated for completion in 2014-15.

While Behuria’s statement raises questions on the project’s future it should also be remembered that IOC has been forced to budget for higher losses in the petroleum business this year and this might well have coloured his view of the future.

But I am quite sure that putting this project together will be a formidable task given rising costs and also likely public resistance.

But it will be interesting to see if IOC’s board will give final approval to the refinery and petrochemical project at Paradip in Orissa. Final cost estimates for the project are being worked out and it is due to be placed before the board for final approval this month.

Another project that is due to come up to the IOC board is for a paraxylene (PX) plant adjacent to the Vadodara refinery. A detailed feasibility is being carried out for a 360,000 tonnes/year unit with completion targeted for end-2011.

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