Chennai: Chennai Petroleum Corporation Limited and Indian Oil Corporation are open for having a strategic investor as their partner for their 15 million tonne per annum (mtpa) grass root greenfield refinery cum petrochemical project planned at Ennore, Chennai.

According to Chennai Petroleum''s managing director K K Acharya, "We have selected Engineers India Limited to study the process configuration and prefeasibility studies. Their report is expected this June."

While Chennai Petroleum is a refinery company, it decided to add petrochemical project to make the project commercially viable. The whole project would involve an outlay of Rs35,000 crore.

According to director, finance, N C Sridharan, the investment requirement for the project would peak only during fiscal 2008-09. "We have ample time to decide on the strategic investor. Projects like this would have a debt: equity ratio of 2:1." Similarly it has not been decided whether the project should be promoted under a new joint venture company or under Chennai Petroleum.

Meanwhile the company has asked the Tamil Nadu government for 3000 acres land at Ennore.

The mega investment apart, Chennai Petroleum has chalked out around Rs6,000 crore worth of projects over the next five years. The major project being the resid upgradation project at its Manali refinery needing an outlay of Rs3,000 crore. The refinery hopes to increase distillates yield by 10 per cent after this project. According to Acharya, pre-project activities have begun. The project will have a delayed coker unit along with associated facilities and is expected to go on stream in 2010.

The refinery company is also planning a Rs2000 crore investment to meet the Euro IV norms for auto fuel quality. "For meeting the Euro IV norms of motor spirit and high speed diesel before April 1, 2010 the company has taken up three projects (a) Progression to a continuous catalytic reformer (b) installation of new diesel hydro treating unit and (c) installation of a new isomerisation unit." The company has completed the licenser selection process and the project is expected to be commissioned by the end of 2009.

The company has also taken up a project to de-bottleneck the refinery III unit at Manali to increase the capacity by 1 mtpa to 4 mtpa at an outlay of Rs134 crore. On completion the total refining capacity at Manali would go up to 10.5 mtpa by March 2009. The other projects are: (a) a propylene recovery unit at Manali at an outlay of Rs300 crore (b) laying of new 42" crude oil pipeline from Chennai Port to Manali (c) setting up of 17.6MW capacity windmill farm at Palghat pass near Pollachi at an investment of Rs90 crore.

"Orders have been placed for the windmills with Enercon. Already four mills have been commissioned this month and the project will be fully operational this August," said Acharya.

Meanwhile the company closed FY07 with a turnover of Rs29349 crore and a net profit of Rs565 crore as against Rs25409 crore and Rs481 crore respectively. The gross refining margin for the year was $5. The company board has recommended a dividend of 120 per cent.

Speaking about the company''s performance for the last fiscal Acharya said, "The throughput achieved was 10.40 mtpa as against 10.36 mtpa the previous year. The Manali refinery operated at 103 per cent of design capacity." During the year under review, the Cauvery Basin refinery processed highest ever natural gas of 71.6 tmt for LPG recovery, compared to the previous best of 63.9 TMT during the year 2003-04.

According to him the company was able to maintain the distillate yield even at the enhanced crude throughput. "This was possible by higher secondary processing," he added. As a step towards widening the crude oil basket, Chennai Petroleum processed three new crude oils last fiscal viz Marib Light from Yemen, Azeri Light from Azerbaijan and Girassol from Angola.

The company''s efforts to bring down the energy index at its Manali refinery is yielding good results. Last year the energy index was 76. "We have identified 22 energy conservation actions to bring down the energy consumption index to about 72 in next two to three years," remarked Acharya. An external consultant has been appointed for its integrated refinery business improvement programme.

According to him, the boom in the aviation sector has resulted in over 25 per cent growth in the consumption of aviation turbine fuel. While Chennai Petroleum has sent its products to markets like Kolkatta and Mumbai within India, it has exported products worth Rs1533 crore to countries like China, Japan, Malaysia, Singapore and Bangladesh.