IOC plans Rs1.75 lakh crore capex in massive expansion

Indian Oil Corporation plans to invest Rs1.75 lakh crore to virtual double its refining capacity, boost petrochemical production, expand gas business and lay new pipelines to become a vertically integrated company.

According to IOC's latest annual report, the largest refining and oil marketing company plans to raise capacity to convert crude oil into fuels like petrol and diesel to 150 million tonnes per annum by 2030 from the current 80.7 million tonnes. The corporation currently owns and operates 11 out of the 23 oil refineries in the country. 
As the leading refiner in the country and a dominant player across a diverse energy portfolio, IOC is looking at all emerging opportunities for organic and inorganic growth through vertical integration and strategic diversification, besides pursuing value-creating research areas, the report said.
IOC chairman Sanjiv Singh said in the annual report that projects worth Rs32,000 crore are in various stages of execution and plans are afoot for implementing newer projects costing about Rs1.43 lakh crore. Plans to nearly double refining capacity by 2030 include greenfield refineries of subsidiary Chennai Petroleum Corp Ltd (CPCL) and the proposed Ratnagiri Refinery & Petrochemicals Ltd (RRPCL), apart fro brownfield expansions. 
While  9 million tonnes capacity will be added to CPCL, RRPCL is building the world’s largest integrated greenfield refinery-cum-petrochemicals complex with 60-million tonnes per annum capacity. 
The  RRPCL project is being executed in partnership with state-owned BPCL and HPCL along with Saudi Aramco and ADNOC of UAE. “Several pipeline projects with a combined capital expenditure of over Rs20,000 crore are under implementation.
Singh said IOC’s 5-million tonnes a year LNG import terminal at Kamarajar Port in Ennore in Tamil Nadu would be commissioned by the end of the current year. Also, IOC is booking capacities in other LNG terminals, both on the east and west coasts of India. “IOC is developing three natural gas pipelines — Mallavaram-Bhopal-Bhilwara-Vijaipur, Mehsana-Bhatinda & Bhatinda-Jammu,” he said, adding it is also partnering in the development of a 1,500-km natural gas pipeline grid to connect Guwahati to other major cities of all north-eastern states. He said IOC retails CNG to vehicles and piped cooking gas to households in nine cities and is “aggressively taking part in the various bidding rounds for gas.”
Upon completion, IOC’s pipeline network will cover 20,000 km. IOC is also laying a 69-km pipeline to transport petroleum products to Nepal. Currently, its investment cycle include Rs16,628 crore in upgrading refineries to produce Euro-VI emission norm compliant petrol and diesel by 2020 as against Euro-IV fuel being produced now. Moreover, it will invest Rs15,600 crore to expand petrochemical projects and another Rs74,600 crore in raising the capacity of its existing refineries. 
Another Rs36,500 crore worth of projects are awaiting board board approval. These include expansion of its latest refinery at Paradip in Odisha to 18 million tonnes from 15 million tonnes at present and the expansion of the Bongaigaon unit. Expansions are planned at the firm’s Panipat refinery in Haryana, Koyali refinery in Gujarat, Barauni refinery in Bihar and Mathura refinery in Uttar Pradesh
IOC will infuse equity in Paradip Plastic Park Ltd, a joint venture with Industrial Development Corporation of Odisha to promote downstream plastics-based units near Paradip Refinery. 
It will also set up a Textiles Park in Odisha, based on the feedstocks available from Paradip refinery. “Looking at the future, the company is strongly focussed on offering a bouquet of eco-friendly energy options other than liquid fuels to its customers. These would include natural gas, LNG, CNG, PNG, autogas, biogas, hydrogen and electricity,” Singh said.