IOC to invest Rs 61,077 cr in petchem complex at Paradip, Odisha

India's oil company IOC will invest Rs 61,077 cr in building a petrochemical complex at Paradip in Odisha - its largest ever investment at a single location - as it doubles down on its transition plan

India's top oil company IOC will invest Rs 61,077 crore in building a petrochemical complex at Paradip in Odisha - its largest ever investment at a single location - as it doubles down on its transition plan.

In a statement, Indian Oil Corporation (IOC) said its board has given "Stage-1 approval for setting up Paradip petrochemical complex at Paradip, Odisha at an estimated cost of Rs 61,077 crore."

"This mega project will be the largest-ever investment of Indian Oil at a single location," it said but did not give timelines for completion of the project.

This is a part of its transition plan including boosting petrochemical intensity to help protect against volatility. Petrochemical intensity refers to the percentage of crude oil that is converted directly into chemicals that are used to make plastic and other material.

Crude oil, pumped out of the ground and from below the seabed, is processed in refineries to make petrol, diesel and other fuel. It can be processed to make petrochemicals, bypassing the fuels.

IOC's petrochemical intensity - the percentage of crude oil converted into chemicals- is low at 5-6 per cent currently. The company intends to take it up to 10-12 per cent.

The firm's newer refineries at Panipat in Haryana and Paradip in Odisha have the petrochemical intensity of 15-20 per cent which would be raised to 25 per cent, its chairman Shrikant Madhav Vaidya had told PTI in an interview last month.

Energy transition refers to the shift from fossil-based systems of energy production and consumption - including oil, natural gas and coal - to renewable energy sources like wind and solar, as well as lithium-ion batteries. This shift is likely to gradually cut demand for petrol and diesel and so in preparation of that IOC is doing petrochemical projects.

The company said the petrochemical complex at Paradip would include a world-scale cracker unit along with downstream process units for producing several petrochemical products including polypropylene (PP), high density polyethylene (HDPE), linear low-density polyethylene (LLDPE) and poly vinyl chloride (PVC) - these being building blocks of different grades of plastics. It shall also facilitate production of niche chemicals and petrochemicals like phenol and isopropyl alcohol.

Talking of the development, Vaidya said, "This mega project is aligned with Prime Minister Narendra Modi's vision of Purvodaya that is sure to accelerate the development trajectory and fuel prosperity in Eastern India. This cutting-edge, state-of-the-art petrochemical complex will undoubtedly be transformative in its impact, significantly advancing the Aatmanirbhar Bharat initiative."

"This mega project shall significantly improve the petrochemical intensity index of IndianOil. It shall be a growth driver in making the company a major player in the petrochemical industry, while strengthening India's self-reliance in the petrochemical sector," he said.

The project, the statement said, will catalyze the growth of PCPIR and Plastic Park at Paradip.

"On commissioning of this project, domestically available Petrochemicals are expected to provide feed and vitalise industrial growth in key downstream industries like plastic, pharma, agrochemical, personal care, paints etc. It is also expected to create employment opportunities in eastern India, especially Odisha," it added.