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Indian Oil to add polypropylene unit at Paradip Refinery in India

IOC Paradip PP project received board approval

The state-owned Indian Oil Corporation Limited (IOC) company received the board approval for the construction of greenfield world class polypropylene (PP) production unit at the Paradip Refinery and Petrochemical complex currently in construction on the east coast of India.

India counts not less than 22 refineries out of which 10 belongs to IOC.

With the Paradip Refinery, IOC will add the eleventh refinery in its portfolio.

IOC_Paradip_Polypropylene_MapLocated 120 kilometers east of Bhudaneswar in the State of Odisha, IOC Paradip Refinery has been designed with a capacity of 300,000 barrels per day of crude oil.

To build the Paradip Refinery and integrated Petrochemical complex, IOC reserved 3344 acres in the industrial area of the Port of Paradip.

Strategically located on the east coast of India, the Paradip Refinery has been designed to treat heavy crude oil with high sulfur content coming from Middle-East, Asia and Americas such as Mexico or Venezuela.

This sulfur loaded heavy crude oil requires complex processes for pre-treatment before entering the normal refining process that may nearly double the cost of the refinery.

But this additional capital expenditure is well balanced by the much lower price of the heavy crude compared with the light crude.

Considering that more than 50% of the global crude trading is now on heavy crude, this decision gives IOC a much wider choice of sources of supply for its Paradip Refinery.

Since IOC is integrating a petrochemical complex in the Paradip Refinery, the cost of the feedstock will impact the whole value chain from the naphtha to the polyolefins and all hydrocarbon products to be transformed in the Paradip complex.

Foster Wheeler is completing IOC Paradip Refinery

On the downstream side the Paradip Refinery will deliver:

 – 3.5 million tonnes per year (t/y) of liquid petroleum gas (LPG), gasoline, diesel, jet fuel

 – 200,000 t/y of propylene.

Kuwait Petroleum Corporation (KPC) and IOC are currently in negotiation to open 26% stake to the Paradip Refinery.

In the deal KPC is willing to secure the biggest share of the Paradip Refinery crude oil supply while IOC is looking for sourcing flexibility. 

IOC_Paradip_PolypropyleneFoster Wheeler is planning the commissioning of IOC Paradip Refinery at the end of 2014.

Cracked from LPG,  the propylene  output will be exported in the meantime of the polypropylene production unit construction.

In respect with industrial development in India, the domestic market for hydrocarbon products is increasing to a level motivating Indian Authorities to deliver IOC approval to start the construction of the petrochemical complex with the polypropylene unit.

Paradip Polypropylene project should have a capacity of 700,000 t/y and should require 39 months for completion.

In parallel, IOC is already studying the feasibility of the ethylene cracker and other polyolefins units in the Paradip Petreochemical complex for an estimated budget of $1 billion including:

 – 600,000 t/y polyvinyl chloride (PVC)

 – 400,000 t/y monoethylene glycol (MEG)

With an investment of $800 million capital expenditure, IOC is expecting the Paradip Polypropylene project to come on stream on early 2018 with the other polyolefins units to follow by 2020.

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