India’s HPL plans oil-to-chemical project at site of defunct NOCL refinery

Author: Priya Jestin


MUMBAI (ICIS)--India’s Haldia Petrochemicals Ltd (HPL) has received approval from the National Company Law Tribunal (NCLT) to take over and revive the defunct oil refinery project of Nagarjuna Oil Corp Ltd (NOCL).

HPL plans to set up an oil-to-chemical (O2C) project at the site of the defunct NOCL refinery in Cuddalore in southern Tamil Nadu state.

The NCLT giving its approval for HPL’s plan to revive the NOCL refinery and petrochemical project on 18 March, said in its order that the proposed action “has the potential to achieve local demand in the refinery sector.”

The HPL project would also help to develop other downstream industries in Cuddalore, the NCLT order stated.

“The proposed project has been conceptualized considering the integration of petrochemical block with upstream light crude processing facility to generate feedstock for ethylene cracker and aromatics block,” HPL said in a submission to the Environment Ministry in October 2020.

HPL plans to execute the project in two phases. In the first phase, it will construct a 1.8m tonnes/year ethylene cracker and downstream units including high density polyethylene (HDPE), linear low density polyethylene (LLDPE), mono ethylene glycol (MEG) and polypropylene (PP) lines.

“Besides these, the complex would produce chemicals like benzene, butadiene, di-ethylene glycol (DEG), tri-ethylene glycol (TEG) to service demand from domestic and export market,” HPL said.

In the second phase, the company plans to set up a 1.6m tonnes/year paraxylene (PX) line and a 1.25m tonnes/year purified terephthalic acid (PTA) plant, it added.

The total integrated project cost for the first phase, which will include the petrochemical blocks, is estimated to be about Rs583bn ($8bn) and Rs207.6bn for the aromatic blocks in the second phase.

HPL expects to complete the first phase of the project within five years of receiving all the necessary approvals while the second phase is expected to take an additional three years.

NOCL, a joint venture between Nagarjuna Fertilizers & Chemicals Ltd and Tamil Nadu Industrial Development Corp Ltd (TIDCO) had received clearance to set up a 6m tonnes/year refinery in March 2000.

The refinery project, which was supposed to have come onstream in 2012 was delayed due to financial constraints and insolvency proceedings were initiated against NOCL in 2016.

The NCLT in its order, accepted HPL’s proposal to make a payment of Rs 6bn to the company’s creditors to acquire NOCL’s project assets.

($1= Rs72.47)

Image: Haldia Petrochemicals polypropylene plant (Source: Company official brochure)