IOC implementing Rs 60,000 cr worth projects, bets on petrochem

Indian Oil Corporation (IOC) is currently implementing projects worth Rs 60,000-crore, which includes capacity expansion of refineries and building of petrochemical plants.

The nation's largest PSU refiner, with investments of over Rs 20,000-crore in petrochemicals, also expects the sector to contribute 15 per cent revenues in the next three years.

"We are continuously augmenting production capacities and upgrading technologies to meet the energy demands of the nation. As part of this, projects valued at over Rs 60,000-crore are currently under implementation, including a grassroots refinery at Paradip," Chairman Sarthak Behuria told shareholders at the company's 50th AGM here.

"Petrochemicals will be a major driver of IOC's future growth. With stabilisation of production facilities and addition of new product lines and customers during the year, we expect 15 per cent of our revenues to come from this vertical within the next three years," he said.

IOC has a capital expenditure plan of Rs 12,000-crore for FY 10, which includes setting up of more retail outlets and upgrading its refineries to produce Euro III and Euro IV auto fuels that emit less sulphur.

It is also building pipelines to transport naphtha and ATF (jet fuel), Director Refineries B N Bankapur said.

"All projects that are under implementation could be completed in the current fiscal, which includes naphtha cracker at Panipat and a resid upgradation project at Mundra in Gujarat," Bankapur said.

"There is also a hydro cracker project at Haldia and the Panipat refinery expansion to 15 million tonnes per annum (mmtpa). Haldia is also getting expanded from 6 mmtpa to 7.5 mmtpa," he added.

IOC, which currently has a refining capacity of 60.2 million tonnes, is expected to raise this by another 4.5 million tonnes in FY10.

Besides, it is scheduled to complete the petrol (Motor Spirit) quality improvement project at Panipat and Mathura before end-March 2010.

Apart from capex, the refiner will spend another Rs 2,000 crore for maintenance of existing operations.

Behuria said IOC has also signed a memorandum of understanding (MoU) with Nuclear Power Corporation (NPCIL) to set up about 1,500 MW power plants.

"NPCIL has already identified 2-3 sites for the plants. It is a long gestation project of 7-10 years and we expect assured returns of 16 per cent from this joint venture," he said.