Paradip set to take Odisha and eastern India forward
New Delhi 07-Mar-2016
The state-of-the-art Paradip refinery of Indian Oil Corp. Ltd (IOCL), built at a cost of Rs.34,555 crore, was dedicated to the nation by Prime Minister Narendra Modi on 7 February. The foundation stone for the project was laid by former prime minister Atal Bihari Vajpayee in May 2000.
Paradip refinery is going to contribute significantly towards India’s energy security. The INDMAX (Indane Maximisation) unit, built on indigenous technology developed by IOCL in its research and development facility, allows 40% more production of LPG from the same quantity of crude and this is by far the highest in the world. The ability to produce more LPG from the same quantity of crude will certainly help to fulfil the prime minister’s vision of providing clean fuel to more and more households—it is significant in the context of World Health Organization data that annually, 500,000 deaths in India are linked to diseases caused by the smoke generated from using unclean fuel such as firewood, coal, etc.
The Paradip refinery is designed to process low-cost heavy crude; in fact, it can refine any type of crude. This will not only save foreign exchange for the country as heavy crude is cheaper, but will also allow us to geographically diversify our crude sourcing, including from Africa, Latin America and Russia.
Our prime minister has a clear vision for inclusive growth. As he has often said, unless the eastern part of India develops, the county will not be able to move ahead with full force. In other words, the development of eastern India is a necessary precondition for the development of India. That vision takes concrete steps towards reality as the Paradip refinery is poised to kick-start economic development in eastern India, especially Odisha. The Paradip project is going to be significantly different from past industrial projects, especially iron and aluminium industries, executed in Odisha. These were conceived to act as growth poles. Unfortunately, ancillary industries did not follow up as one would expect. Today, neither do we find a thriving auto industry dependent on iron and steel nor other industries producing finished products of aluminium in Odisha. Somewhere, we have failed.
All that is set to change. The Paradip refinery has a clear roadmap for downstream industrial development. Of the promised investment of Rs.1 trillion in the oil and gas sector in Odisha by my ministry, a substantial portion has been proposed in the petrochemical sector. The refinery not only produces petrol, diesel, ATF (aviation turbine fuel) and kerosene, but is also designed to develop as a major petrochemical hub. IOCL is setting up a polypropylene unit at a cost of Rs.3,150 crore in the refinery complex. Polypropylene can be used in ancillaries to make all kinds of plastic items—from moulded furniture to plastic used in making of aircraft, packaging materials, containers, medical disposables, adhesive tapes, etc. IOCL is working on setting up an ethylene derivative complex at an estimated cost of Rs.3,800 crore, a PX-PTA complex at Rs.10,000 crore and a petcoke gasification plant for production of synthetic ethanol at Rs.18,000 crore.
Further, various product and crude pipelines—IOCL Paradip-Raipur-Ranchi product pipeline (Rs.1,800 crore), IOCL Paradip-Haldia-Durgapur LPG pipeline (Rs.915 crore) and IOCL Paradip-Haldia-Barauni crude pipeline (Rs.590 crore)—are at various stages of completion. Some other such projects are GAIL Surat-Paradip gas pipeline (Rs.10,281 crore) and GAIL Ranchi-Talcher-Paradip gas pipeline (Rs.2,500 crore). An LNG terminal will also be set up at Dhamra by 2018 and an LPG terminal will be set up in Paradip. To improve human resources, a world-class institute for skill development in hydrocarbon sector is being set up at Bhubaneswar.
All these are going to revolutionize Odisha’s investment climate. As hydrocarbon products (plastics, synthetic yarn and petrochemicals) have huge utility in modern life, ancillary industries will develop rapidly, getting a substantial boost from complementary schemes like Make in India, Start-up India and Mudra Bank. We have ready markets for synthetic yarn in Vietnam and Bangladesh as these countries have developed significant capacities for producing apparel from synthetic yarn. Presently, they are dependent on China for synthetic yarn but looking for alternative sources for better business terms. We can easily tap into that with products from the Paradip complex. It is not a coincidence that petroleum ministers of Bangladesh and Sri Lanka are attending the event of dedication of the Paradip refinery.
Odisha is well-endowed by nature, having rich mineral resources, a large coastline and a number of rivers. It also has a rich maritime history, a strong cultural background and sound intellectual capacity. All its youths need is an atmosphere conducive to realize their potential. Sadly, post-Independence, many a time, Odisha has found its political leadership wanting to provide that opportunity. In 2013, the Raghuram Rajan committee, constituted to suggest ways to identify indicators of the relative backwardness of states, found Odisha at the bottom of the table. That is going to change.
That the Paradip project will be an epicentre of economic activities in Odisha is beyond doubt. It will again set Odisha in fast-forward mode of development. Instead of hunger deaths in Kalahandi, Odisha will be known as an industrially developed state; a state where everyone will have ample opportunities to prove himself/herself; a state that acts as a catalyst for an all-round development of the eastern region. Besides, it will affirm the commitment of the prime minister to Sabka Saath Sabka Vikas.
