KOLKATA (ICIS)--Indian Oil Corporation Limited (IOC) will not scrap its plans for an acetic acid (AA) project despite its proposed collaboration with energy and petrochemicals major BP falling through, a company official said on Thursday.
BP confirmed its planned AA joint venture (JV) with IOC in Vadodara, Gujarat, has been scrapped after both companies faced a number of challenges, particularly with capital costs, in developing an attractive project.
IOC would again look into building an AA production plant, creating a new detailed project report (DPR) and finding a technology/equity partner, the official said.
He added that IOC, since early this year, has been scouting for partners for various downstream projects, including an ethylene oxide purification unit at its refinery in Panipat, northern India, and a polypropylene (PP) plant at its upcoming refinery in Paradip on the eastern coast.
The ongoing process of seeking collaborators for an AA project would also be expanded, he said.
Internally, the company has held discussions on the feasibility of incorporating an AA production facility at its refinery/petrochemical project planned for the western coast of India, he added.
On calling off the collaboration with BP, the official said concerns cropped up within both partners on the configuration of the plant, capital expenditure and return on investments.
He added the collaboration had not progressed beyond a joint DPR after the memorandum of understanding (MoU) was signed between the two companies in 2011.
The MoU envisaged the proposed 1m tonne/year AA plant using gasification facilities using BP technology using IOC’s petroleum coke feedstock from its refinery in Koyali, Gujarat province.
IOC has already appointed consultant engineers to prepare a project report for a refinery and petrochemical plant including selecting a site along the western Indian coastal provinces of either Maharashtra or Gujarat for planned investment of about $5bn. The feasibility of adding an AA plant to the project was also at the discussion stage, the official said.