IOCL invests RS 2200-cr in Paradeep refinery

Indian Oil Corporation Ltd (IOCL), which is setting up a 15 million tonne per annum refinery at Paradeep, has so far invested Rs 2200 crore in the project.

While the cost of the refinery excluding the petro-chemical complex is estimated at Rs 29,777 crore, IOCL has already committed Rs 4,680 crore, said state industry minister Raghunath Mohanty.

The state-run oil company signed a rupee term loan agreement for Rs 14,900 crore with a consortium of 21 lenders led by State Bank of India (SBI) to finance the Paradeep project in May this year.

Mohanty said, the work on infrastructure development for the proposed refinery has started at the site and land measuring 3344.65 acres has been handed to IOCL authorities. The state government signed a memorandum of understanding (MoU) with IOCL for setting up a refinery at Paradeep in 2004.

Though it was targeted to be completed by 2010, the work has been delayed. In the changing scenario this project is likely to be completed by 2012, he added.

He said, 124 families in Ersama block will be displaced due to the project and out of them 64 families have agreed to stay in resettlement colonies.

Apart from the refinery, the Centre proposes to establish a Petroleum, Chemicals and Petro-Chemical Investment Region (PCPIR) complex at Paradeep at an investment of Rs 2,80,000 crore.

Sources said, the construction work for the refinery is expected to start in the first quarter of 2010-11. However, some pre-construction activities like detail engineering, procurement of long lead items and material requisition preparation for other items have already started.

In a recent communication to the Orissa chief secretary, the company stated that the plant construction will follow the completion of the part design or part engineering so that civil contractors can be awarded the jobs for piling and equipment foundation.

The state government reviewed the progress of the project in August this year. The issues pertaining to allotment of land for construction of water intake well at Jobra in Cuttack and laying of the pipeline were discussed.

The state government is reported to have assured the company to expedite the process of allotment of land. IOC plans to source the required water from Mahanadi near Jobra and pump it through a pipeline to Paradeep. Meanwhile, the Paradeep Port Trust (PPT) has provided the required right of way for the proposed refinery.