IndianOil’s Refining capacity to be 80.70 MMT by 2012
New Delhi   06-Oct-2010


B N Bankapur, Director (Refineries), Indian Oil Corporation Ltd.

India's leading fortune 500 Company IndianOil will raise its refining capacity to 80.70 by 2012. The company is further building up refining capacity by establishing a new refinery and capacity expansions. With the Capacity expansion of 1.5 MMTPA at Haldia and 3 MMTPA at Panipat Refinery getting completed by October 2010, the refining capacity of IndianOil will go up to 54.2 MMTPA and group refining capacity will be 65.7 MMTPA by the end of 2010. Disclosing this Director [Refineries], Mr. B N Bankapur said that IndianOil plans to take the group refining capacity to 80.7 MMT per annum with the commissioning of the Paradip Refinery in 2012 and will continue to be the key player in Refining.

Speaking at the IndianOil Day on September 01, 2010, Mr. Bankapur said that the MS / HSD quality improvement projects at all Refineries have been completed and are producing and supplying Euro-IV grade Motor Spirit arid High Speed Diesel. Four projects at Digboi, Haldia, Barauni and Gujarat Refineries have been registered with UNFCCC under the Clean Development Mechanism (CDM) initiative with potential CERs of 56374. We are challenged by stricter environmental norms in terms of emissions of greenhouse gases, climate change issues, growing demand for better product quality, emerging frontier technologies and economies of scale for sustainable development, amongst others, said Mr. Bankapur.

With the economy projected to grow at a rapid pace over the next two decades, demand for oil and gas is expected to increase at an annual rate of about 3.5 percent in the next two decades, making India among the largest consumers of oil and gas in the world. This augurs well for the Indian Refining Sector. Key areas for action in refining sector include Efficiency Improvement, Value Addition, Capacity Enhancement and Diversification for bottom-line improvement and at the same time addressing Climate Change issues, added Mr. Bankapur.
The World primary energy consumption fell by 1.1 per cent in 2009, the first decline since 1982. However energy consumption in China and India - among the nations least impacted by the global recession - grew faster than their GDP. The data so far in 2010 shows that world energy consumption at all levels, including the oil industry, is again on the rise led by Emerging Market Economies (EMEs) like China and India.

With margins under pressure, the way forward is to integrate refining with value-added products such as petrochemicals and invest in methods to improve distillate yields. Today production of high value products like propylene, ethylene, LAB feedstock or integration with aromatic complex in order to add more value to the refining operations has assumed major significance. The complexity of our refineries is therefore expected to increase further. At Panipat, the integration of Petrochemicals with refinery operations and the ongoing refinery capacity enhancement will lead to more value being added to the refining operations. The Panipat Naphtha Cracker sourcing surplus naphtha from Gujarat, Panipat & Mathura Refineries will produce 800 KTA of Ethylene and 665 KTA of Propylene, which will act as feed for downstream polymer units. In the days ahead, the Refinery processing schemes and the addition of new facilities in existing refineries would be governed by economies of scale and the integration of petrochemicals to maximize profitability.

To accrue maximum competitive advantage, lndianOil's business strategy straddles the entire hydrocarbon value chain through integration and diversification initiatives. IndianOil's venture into new businesses, including petrochemicals, has been a contributing factor for the remarkable results facilitating the Corporation to be the 'energy of India’. Today, IndianOil holds a significant market share of LAB in India and exports to 19 countries. The PTA (Purified Terephthalic Acid) business expanded to cater to all major domestic customers and clocked a sales volume of 5,28,000 tonnes with a growth of over 30% from the previous year. The Naphtha Cracker and downstream polymer units at Panipat which is lndianOil's largest petrochemicals investment costing Rs.14,439 Crore made its maiden dispatch of polymers in April 2010. A state-of-the-art 120,000 tonnes per annum Styrene Butadiene Rubber (SBK) unit is under implementation at Panipat. All these initiatives are primarily aimed at harnessing the opportunity in Petrochemicals demand which has been growing at an attractive 13-15% in the last two decades and is expected to keep the same momentum in the future.