Indian Oil to invest ₹61,077 crore in petchem complex at Paradip in Odisha

Indiathe top oil company IOC will invest Rs 61,077 crore in the construction of a petrochemical complex on Paradise in Odisha – the largest ever investment in a single location – while doubling down on its transition plan. In a statement, Indian oil company (IOC) said the board has “given Phase 1 approval for set up paradise petrochemical complex in Paradip, Odisha at an estimated cost of Rs 61,077 crore.”

“This mega project will be Indian Oil’s largest-ever investment in a single location,” it said, but did not provide timelines for the completion of the project.

This is part of the transition plan, including boosting petrochemical intensity to help protect against volatility. Petrochemical intensity refers to the percentage of crude oil that is converted directly into chemicals used to make plastics and other materials.

Crude oil, which is pumped from the ground and from under the seabed, is processed in refineries into gasoline, diesel and other fuels. It can be processed to make petrochemicals, bypassing the fuels.

The IOC’s petrochemical intensity – the percentage of crude oil converted to chemicals – is currently low at 5-6 percent. The company plans to take it to 10-12 percent.

The company’s newer refineries Panipat in Haryana and Paradip in Odisha have the petrochemical intensity of 15-20 percent which would be increased to 25 percent, the chairman Shrikant Madhav Vaidya had told PTI in an interview last month.

Energy transition refers to the shift from fossil fuel-based energy production and consumption systems – including oil, natural gas and coal – to renewable energy sources such as wind and solar, as well as lithium-ion batteries. This shift is likely to gradually reduce the demand for gasoline and diesel and so the IOC is conducting petrochemical projects in preparation for it.

The company said the petrochemical complex at Paradip would include a world-class cracker unit along with downstream process units for the production of various petrochemicals, including polypropylene (PP), high-density polyethylene (HDPE), linear low density polyethylene (LLDPE) and polyvinyl chloride (PVC) – these are building blocks of different types of plastics. It will also facilitate the production of niche chemicals and petrochemicals such as phenol and isopropyl alcohol.

Speaking of development, Vaidya said: “This mega project is aligned with the Prime Minister Narendra ModiPurvodaya’s vision which is sure to accelerate the development trajectory and fuel prosperity in East India. This cutting-edge, state-of-the-art petrochemical complex is bound to have a transformative impact and significantly advance the Aatmanirbhar Bharat initiative.”

“This mega project will significantly improve IndianOil’s petrochemical intensity index. It will be a growth engine to make the company a major player in the petrochemical industry while strengthening India’s self-sufficiency in the petrochemical sector,” he said.

The project, the statement said, will catalyze the growth of PCPIR and Plastic Park in Paradip.

“Upon commissioning of this project, domestically available petrochemicals are expected to provide feed and drive industrial growth in key downstream industries such as plastics, pharma, agrochemicals, personal care, paints etc. It is also expected to create employment opportunities in East -India, especially Odisha,” it added.

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