Page 16 - Plastics News April 2017

COMPANY NEWS

Indian Oil plans to expand capacity by 5 mln tpa at Paradip

refinery despite row with State

ndian Oil Corporation Ltd (IOCL) plans to expand allowed a working group two months time to settle the
Icapacity of its Paradip refinery from 15 mln tpa to row. The working group formed to break the deadlock
20 mtpa and beyond, despite its stand-off with the between the two sparring parties, is chaired by the
Odisha state government over grant of fiscal incentives secretary, Union minister for petroleum & natural gas and
to its Paradip crude oil refinery according to a report in has representation from the state government and IOCL.
Business Standard. The proposed expansion plan is aimed
at generating more cash flow and improving operating
margins. "We intend an investment of Rs 4,500 crore Environment clearance granted
to upgrade the Paradip refinery to roll out petroleum for RIL's Dahej petrochemical
products that would comply with BS-VI emission norms", expansion
Sanjiv Singh, director (refineries) of IOCL told Business
Standard. The company official declined to commit the
eliance Industries (RIL) has received environment
Rclearance for expansion and debottlenecking of its

timeline for expansion. As per the original pact signed
between the Odisha government and IOCL in February
2004, the government had allowed deferment in VAT Dahej petrochemical facility in Gujarat. The green nod
payment by the Paradip refinery for a period of 11 years to the proposed project, which will be carried out within
from the date of commercial operations of the project. the existing plant area of 700 hectare, is subject to some
The incentive was offered to ensure commercial viability conditions, as per a government official. The estimated
of the refinery whose original capacity was pegged cost of the expansion project is Rs 13,250 crore. A
at 9 mtpa. Later, IOCL redrew the project design and budget of Rs 400 crore will be kept aside for environment
expanded capacity to 15 mtpa. protection and conservation. The petrochem major
plans expand its Dahej facility in view of erratic supply
The capacity expansion coupled with the delay in
of feed stock, change in the government's policy
commissioning of the project by the oil major prompted to prioritise domestic supply over industrial sector,
the state government to withdraw the incentive. The adequate supply of Shale gas ethane from the US, besides
government rescinded the notification for VAT deferment meeting demand-supply gap of petrochemicals in India.
and served a notice on the oil company for payment of The RIL's proposal also include setting up of new plants
pending VAT amounting to Rs 1485 crore. IOCL contested including Chlorinated Poly Vinyl Chloride (CPVC), Vinyl
the notice of the government in the Odisha High Court Chloride Monomer (VCM), Poly Vinyl Chloride (PVC) and
which has kept in abeyance the demand notice and a dedicated Ethane storage tank.

Plastics News | April 2017 16