IOCL set to face more delays in getting land for petrochem expansion

The country’s top oil marketing company, Indian Oil Corporation Ltd (IOCL), is slated to face more delay in getting land from the Odisha government for putting up different units of its planned petrochemical complex at Paradip.

IOC, in February last year, had asked for 2,290 acres of additional land to commission the petrochemical units. The oil major preferred to have land contiguous to its 15-million-tonne-per-annum crude oil refinery at Paradip.

But even more than a year of making an online application for land, IOCL’s land allotment is yet to be done. Riled with the delay in land allotment, IOCL chairman Sanjiv Singh had shot off a letter to Odisha chief secretary Aditya Padhee recently, requesting for allotting land on priority.

“Plans are afoot to implement a world-scale PC-PTA plant at Paradip. Setting up a Pet Coke gasification project is also being conceptualised. These new projects would involve large investments and help the plastic and textile industries grow in the region. However, these plans of IOCL require additional land as the existing land in the refinery has already been committed to projects under execution.

Without additional land, we are not in position to firm up our plans and process with identified projects’, the letter stated.

But, government sources said land allotment to IOCL cannot be done till the company’s fresh investment package is approved at the highest level. On the crude oil refinery spread over 3,300 acres, the oil behemoth has already invested Rs 350 billion. The company has pledged to invest Rs 517.8 billion more on various components of the petrochemical complex. The investment expenditure might also include ramping up the refinery capacity to 20 million tonnes.

IOCL did not respond to a questionnaire mailed by Business Standard.

The first petrochemical unit of IOCL- the polypropylene complex where IOCL is investing Rs 31.5 billion is expected to be operational within six months, Petroleum & Natural Gas minister Dharmendra Pradhan said recently. The plant would make use of Spheripol Technology from Basell, Italy, and will be capable of producing different grades of polypropylene. However, it will commence with the production of homo grade initially. The major facilities envisaged under the project are coker LPG treater unit, warehouse for polypropylene storage and other associated facilities such as flare and cooling tower.

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 38 billion.

Similarly, two projects –the purified terephthalic acid (PTA) plant and petcoke gasification based synthetic ethanol plant would together cost IOCL Rs 280 billion and are due to be commissioned by September 2021.