IOC lines up Rs 18,000 cr to raise Panipat refinery capacity -:- Equity Research

Indian Oil Corporation , the nation's largest oil firm, plans to invest Rs 18,000 crore to raise capacity of its Panipat refinery in Haryana to 25 million tonnes (mt) by 2020, larger than previously planned. IOC had previously planned to raise capacity of Panipat refinery from 15 mt to 20.2 mt, but now it is looking at raising the capacity straightway to 25 mt, its Director (Refineries) Sanjiv Singh said here. "We have land at Panipat refinery site and so we are looking at going straight to 25 million tonnes," he said. "We have to look at the capacity of the pipeline, which carries crude oil from west coast to the refinery before finalising if the capacity should be expanded to 20.2 million tonnes as planned earlier or go straight to 25 million tonnes." IOC owns and operates 11 out of India's 23 refineries with a combined refining capacity of 80.7 mt per annum. Singh said the company board will shortly take up investment approval for the Panipat expansion as well as that of capacity upgrade at Koyali refinery in Gujarat and Mathura unit in Uttar Pradesh. It is looking to scale up its Koyali refinery capacity to 18 mt from 13.7 mt currently while a 3-mtpa capacity addition is planned at Mathura. "We have land at both Koyali and Mathura, so the expansion would not be a problem," he said. The IOC board had only last week approved over Rs 9,800 crore investment in expansion of its Barauni refinery in Bihar and setting up a petrochemical unit at the Panipat refinery complex. The board, in its meeting on Thursday, approved expansion of the Barauni refinery to 9 mtpa from 6 mtpa. The expansion along with downstream polypropylene unit will cost Rs 8,287 crore, Singh said. "We have three small crude distillation units at Barauni currently. We plan to pull them down and build new crude processing units. The options before us are to set up one big unit of 9 mt or two units of 6 mt and 3 mt," he said. The Barauni expansion will be completed by 2021-22. The expansion would meet rising demand in eastern India, particularly  in Bihar, Jharkhand and eastern Uttar Pradesh, he said. Also, the board accorded "in-principle" approval for implementation of Olefin recovery project along with expansion of existing naphtha cracker unit, MEG (monoethylene glycol) revamp and benzene expansion unit modifications at Panipat at an estimated cost of Rs 1,527 crore", he said. The Panipat refinery was commissioned in 1998 with a capacity of 6 mtpa. The refining capacity was doubled to 12 mtpa in 2006 and then raised to 15 mtpa in 2010. Once expanded, this will cater to fuel needs of north and western India. "We are working on raising fuel quality specifications to meet Euro-VI standards at our refineries and so, the Panipat expansion too is being reconfigured to meet the new specifications," he said.