IOC Faces Land Hurdle to Expand Paradip Refinery

Non-availability of contiguous land has posed a hurdle for Indian Oil Corporation Ltd (IOCL) to expand the capacity of its 15 million tonnes per annum (mtpa) crude oil refinery at Paradip and upgrade it for rolling out BS-VI compliant petroleum products.

After resolving the tax spat with the Odisha government recently, the oil marketing company has committed to fast track the commissioning of various units of its proposed petrochemical complex and also promised fresh investments. To cater to its expansion and also setting up the planned components of the petrochemical complex, IOCL has asked the Odisha government to provide 2,290 acres of land contiguous to its project site.

“Getting more than 2,000 acres of contiguous land around the refinery site is going to be a challenge. Much of the land needed has to be given up by private land losers”, said a senior Odisha government official.

IOCL is planning to pump in an additional Rs 15,000 crore to scale up refinery capacity to up to 25 million tonnes per annum (mtpa). That apart, it has committed an investment of Rs 4,050 crore to upgrade the refinery to roll out products that can meet BS-VI emission norms.

The oil major was provided over 3,300 acres of land for the crude oil refinery where it has already invested Rs 35,000 crore. The company has pledged to invest Rs 51,779 crore more. The crude oil refinery, petrochemical complex and investment on different pipelines make IOCL the biggest investor in Odisha.

The first petrochemical unit of IOCL- the polypropylene complex where IOCL is investing Rs 3,150 crore is under construction and is expected to be operational within one year. The oil marketing company has also got the in-principle approval of its board to set up a second unit- the mono ethylene glycol plant at a cost of Rs 3,800 crore.

Two more projects have been planned for the petrochemical complex- 1200 ktpa purified terephthalic acid (PTA) plant and petcoke gasification based synthetic ethanol plant. Both these projects would together cost IOCL Rs 28,000 crore and are due to be commissioned by September 2021.

With the availability of mono ethylene glycol (MEG) and PTA from these units, downstream industries like polyester chips, fibers, PET (polyethylene terephthalate) grade chips, PET film grade chips and polyester industrial yarn can be developed.

Under its BS-VI project, IOCL would set up isomerisation unit, FCC (Fluid Catalytic Cracking) gasoline desulphurisation unit, hydrogen unit and kerosene desulphurisation units.