By Ajoy K Das
KOLKATA (ICIS)--Indian Oil Corp (IOC) has turned down an offer from Hindustan Petroleum Corp Ltd (HPCL) to construct a refinery cum petrochemical project in southern Indian province of Andhra Pradesh, an IOC official said on Wednesday.
IOC had several committed large investments in eastern and southern India under various stages of implementation, and for strategic reasons it would prefer to consolidate its presence in western Indian provinces, the official said.
In January 2014, rival oil refiner cum marketer, HPCL had initiated talks with IOC for partnering in construction of a 15m tonne/year refinery and an integrated petrochemical plant entailing an investment of $8bn as the anchor investment for the Andhra Pradesh Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR).
IOC has already heavily invested in eastern Indian province of Orissa, the official said, referring to the 15m tonne/year refinery entailing an investment of $5bn located in the port town of Paradip and is scheduled to go into production later this year.
He said that the IOC board of directors was already planning for further investments at Paradip starting with a 700,000 tonne/year polypropylene (PP) plant at an investment of about $500m.
Additional investments totalling $1.2bn to add an integrated petrochemical plant to the refinery was too under consideration by the board, the official added.
Besides, IOC was constructing a 5m tonne/year capacity liquefied natural gas (LNG) terminal at Ennore, also in the southern Indian province in Tamil Nadu, not far from HPCL’s proposed refinery and petrochemical project in Andhra Pradesh, he said.
Considering that IOC had already appointed consulting firm, Engineers India Ltd (EIL) to prepare a project report for a 15m tonne/year refinery in western India, taking up the joint venture with HPCL would be spreading investments too thin without geographical location and market considerations, the official said.
IOC was considering an integrated refinery entailing an investment of $5bn and subsequently add a petrochemical plant to be located either in Maharasthra or Gujarat and an added advantage being that this project would be the company’s first plant along India’s western coast, the official said.
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