BPCL all set to start work on Rs 5,000-cr complex in Kochi

Kochi petchem project is part of Rs 1 lakh cr planned capex for next five years

State-run oil refiner Bharat Petroleum Corporation (BPCL) is all set to start work on the petrochemicals complex in Kochi with all green clearances in place and securing a Rs 4,000-crore loan commitment from State Bank of India.

"We have all the permissions in place from the Union environmental ministry and other regulatory authorities for the Rs 5,000-crore petrochemicals complex in Kochi. We hope to resume work and complete it as per schedule in 2018," BPCL chairman and managing director S Varadarajan has said.

The chairman also said the Kochi petchem project is part of the Rs 1 lakh crore planned capex for the next five years, out of which Rs 40,000 crore will be spent on refining capacity addition alone.

Finance Director P Balasubramanian told PTI that the company has secured a Rs 4,000-crore loan commitment from State Bank of India for the project.

"We will draw the money as when we begin the work," he said, adding though the loan is not strictly tied to this project alone.

The Rs 5,000-crore Kochi petrochemiclas project, announced in December 2011 as part of a Rs 20,000-crore expansion of the Kochi Refinery, will help the country end its dependence on imports of speciality propylene derivatives- based products such as acrylic acids and acrylates used in plastics, paints, coatings, adhesives, inks and textiles, the company claimed.

But the project suffered a big set back after the Korean chemicals major LG Chem walked out of the JV in August 2013 citing adverse international environment for large investments.

BPCL and LG Chem had signed an agreement in July 2012 to set up a SAP specialty chemicals plant in Kochi.

Following this BPCL tried in vain to buy outright the critical technology to make speciality propylene derivatives and SAP (super absorbant polymers), as there are only five companies in the world which have this technology.

The third largest oil marketer and refiner has said they are still in talks with all the players and hope to complete a JV agreement at the earliest, adding a delay on this front will not affect the overall work on the project.