MUMBAI (ICIS)--Indian Oil Corporation (IOC) has earmarked Indian rupees (Rs) 156bn ($2.4bn) to expand its petrochemical operations in the country and has also identified funds to increase ethanol production by 2030, a company source said.
“We don’t want to remain a refining company alone. In addition to refining, we will be venturing out into different areas like petrochemicals and alternate fuels,” B V Rama Gopal, head of refineries at IOC, told local media.
Petrochemical expansion projects include setting up a 60m tonne/year integrated refinery/petrochemical complex at Ratnagiri in Maharastra state, in collaboration with Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum, the source said.
A planned petrochemical project at Paradip in Odisha state will house a 700,000 tonne/year polypropylene unit in addition to a petcoke gasification facility for synthetic ethanol, and a 1.2m tonne/year purified terephthalic acid unit.
IOC also expects to increase its ethanol output to meet the Indian government’s target of 10% ethanol blending in petrol to reduce reliance on oil imports, the source said.
The IOC board recently approved the acquisition of a 4% stake in New Zealand’s LanzaTech for $20m through its wholly owned subsidiary in Singapore, IOC Singapore Pte Ltd, as part of its proposed plan to increase biofuel production, the source added.
LanzaTech will help the company produce ethanol and other value chemicals from industrial off-gases from IOC’s petroleum refineries, the source said.
IOC expects to begin ethanol production at its 100,000 litre/day plant at its refinery in Panipat, Haryana state by 2021. The ethanol would be manufactured from refinery off-gases and would be used for blending in petrol, the source added.
The company is also investing another Rs746bn in raising the capacity of its existing refineries by 2020, the source said, adding that the company expected to invest a total of Rs1,430bn to double its oil refining capacity to 150m tonnes by 2030.
IOC’s refineries currently have a total capacity of 80.7m tonnes/year.
“There is a need for us to enhance our capacity to meet the future demand and enhance our capacity. We have already made our plans for investment of Rs1.06 trillion,” Gopal said.
IOC is also investing Rs 166bn to complete the upgradation of its refineries to produce Euro-VI emission norms compliant petrol and diesel by 2020.
The company has plans to invest Rs 365bn to increase capacities at its refineries in northeast India and Odisha state, but had not yet received board approval for the same, the source said.
($1 = Rs65)
(Update adds detail on petrochemicals investment plans)
Additional reporting by Nurluqman Suratman