Paradip refinery to be ready by December

IOCL has faced various hurdles in setting up the refinery such as slump in oil market, land & labour problems, delay in CPP

The construction of oil refinery at Paradip by Indian Oil Corporation Ltd (IOCL) is expected to get completed by the end of this year, said Union minister for petroleum and natural gas, Dharmendra Pradhan.

“The Paradip refinery will be able to start commercial production by around December this year,” he said.

Pradhan today reviewed the progress of the oil refinery work in the presence of Odisha industry minister, Debi Prasad Mishra and IOCL officials at New Delhi. The foundation stone for the project was laid in 2000 by former prime minister Atal Behari Vajpayee.

IOCL’s Pradip refinery work has been delayed because of various hurdles including slump in the oil market, land and labour problems, delay in commissioning of the captive power plant and protests over laying of water pipelines from Mahanadi to the plant site.

Originally envisaged to be a 6-mtpa (million tonnes per annum) refinery at an estimated investment of Rs 8,300 crore, the capacity was later raised to 15-mtpa. During the meeting Odisha raised the issue of lack of progress on the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) planned to be developed around the refinery with IOCL acting as is the anchor tenant.

“We discussed the issue of petrochemical complex as IOCL is the anchor tenant of the project and also talked about investment commitment received so far for the PCPIR,” said state industry minister, Mishra. Pradhan said, some projects of the PCPIR unit will be commissioned by the end of this year. He also directed IOCL to prepare a roadmap for PCPIR within three months.

The Odisha government had earlier alleged that IOCL has been dragging its feet over the proposal to be anchor tenant of the PCPIR. Last year, the state had decided to sign a fresh Memorandum of Understanding (MoU) with the oil marketing company incorporating fixed timeline for investment in the PCPIR.

As per the previous commitment of the company in 2010, work on the petrochemical complex was expected to begin two years after the commissioning of the refinery. IOCL had agreed to develop a poly-propylene unit, an ethylene derivative plant as well as mixed feed cracker unit within the PCPIR.

Since the refinery project is already behind the schedule, the state government wanted a fresh agreement mentioning fixed deadline for the petrochemical complex project.

The PCPIR policy was framed by the Centre to promote investment in the petrochemicals sector and make the country a major hub for both domestic and international markets. Under the policy, the Centre has proposed to set up four PCPIRs in states of Andhra Pradesh, Odisha, Gujarat and Tamilnadu, which are at different stages of implementation.

In Odisha, the PCPIR hub in Kendrapara and Jagatsinghpur districts is expected to draw an investment of about Rs 2.8 lakh crore.