CPCL lines up Rs 20,000 cr investment for expansion

Indian Oil Group firm Chennai Petroleum Corporation (CPCL) has lined up an investment of Rs 20,000 crore over the next five years for capacity expansion, a top company official said here today.

"CPCL is planning to set up a 9 million tonne per annum brownfield refinery project at Manali at a cost of Rs 10,000 crore. This is to replace the aging 2.8 million tonne refinery," IOCL Chairman B M Bansal told reporters here.

The project is expected to be commissioned by the end of 2015, he added.

"Around Rs 2,000 crore worth of projects were already going on... The major capex will be there for the replacement of the CD1 to 9 million tonne...", he said

Besides this project, he said CPCL plans to install a Resid Upgradation unit at an estimated cost of Rs 3,350 crore, which is expected to be complete by the end of 2013.

A new 42" crude oil pipeline to replace its existing 30" pipeline from the Chennai Port to the Manali Refinery, in Tamil Nadu, at a cost of Rs 65 crore was also planned, he said.

Asked how the Chennai-headquartered company would fund these projects, CPCL Managing Director K Balachandran said the current GRM (Gross Refinery Margin) of $5-6 per barrel would enable the company to easily fund these projects through internal resources.

On CPCL's Sri Lankan operations, he said, "There are still some under-recoveries, but still we are operating," he said.

Meanwhile, CPCL declared a dividend of 120 per cent for the year 2009-2010. Bansal made a formal announcement at the company's 44th Annual General Meeting held today.

For the year 2009-10, the company reported a turnover of Rs 29,184 crore and a Profit After Tax of Rs 603.22 crore.