Indian Oil Corp. Ltd. (IOC) has granted approval for preliminary development work to proceed on a long-planned grassroots petrochemical complex that would be built nearby and integrated with IOC’s existing 15-million tonnes/year (tpy) refinery in Paradip, Odisha, on India’s northeastern coast.
The late-March decision by IOC’s board grants in-principle approval for the operator to carry out preliminary project activities—including preparation of a detailed feasibility report—for setting up the proposed petrochemical complex, IOC said in filings to National Stock Exchange of India Ltd. and BSE Ltd.
The Stage 1 approval estimates the project at a cost of 610.77 billion rupees ($7.39 billion), which would be IOC’s largest single-site investment ever, the operator said.
The planned Paradip petrochemical complex would be one of India’s four proposed Petroleum, Chemicals, & Petrochemical Investment Regions (PCPIR).
To be set up on 284 sq km of land spread over Jagatsinghpur and Kendrapara districts, the Paradip PCPIR will be anchored by IOC’s Paradip refinery and petrochemical units that, together, would supply the chemical complex all necessary feedstock, including monoethylene glycol, petcoke-based synthetic ethanol, and paraxylene-purified terephthalic acid (PX-PTA), according to documentation from India’s National Investment Promotion & Facilitation Agency.
In its latest 2021-22 annual report to investors, IOC said it expects to commission the PX-PTA plant at Paradip by January 2024 (OGJ Online, May 24, 2021). Once completed, the new PX-PTA plant will have a PX production capacity of 800,000 tpy, which will be used as feedstock for an adjacent 1.2-million tpy PTA plant to be built as part of the project (OGJ Online, Sept. 18, 2020).
Alongside supporting IOC’s enhanced focus on further integration of its downstream refining and petrochemical operations to meet India’s rising demand for plastics and textiles, as well as its goal of derisking its conventional fossil fuels business, the new PX-PTA plants comes as one IOC’s other petrochemical-related projects at Paradip intended to support the government of Odisha’s plan to establish the Paradip PCPIR (OGJ Online, July 10, 2020).
Paradip PCPIR
According to IOC and the government of India, the Paradip petrochemical complex will include a yet-to-be-identified type of cracker for production of ethylene, along with downstream process units for producing derivative products including polypropylene, high-density polyethylene, high-density polyethylene, linear low-density polyethylene, polyvinyl chloride, monoethylene glycol (MEG), among others. The complex also would enable production niche chemicals such as phenol and isopropyl alcohol.
In an official description of the project, the government of Odisha said IOC has already agreed to the following feedstock supply commitments to the PCPIR:
- PX; 200,000 tpy.
- Polypropylene; 700,000 tpy.
- Petcoke; 1.25 million tpy
- MEG; 450,000 tpy.
With draft versions of the Paradip PCPIR’s environmental impact assessment (EIA) and environmental management plan (EMP) completed and preparation of the final EIA and EMP reports now under way, the project will still need to gain approval of its final, comprehensive EIA-EMP from India’s Ministry of Environment, Forest, and Climate Change (EFCC) to obtain the environmental clearance required to proceed to construction, the Department of Chemicals and Petrochemicals of India’s Ministry of Chemicals & Fertilizers said in its recently released 2033-23 annual report.
Neither IOC nor the government of India have officially confirmed details regarding an anticipated timeframe for completion of the entire Paradip PCPIR or other potential operators planning to participate in the project.
