Indian Oil to expand Panipat naphtha unit capacity to 1.2 mln tpy by 2019

By Seng Li Peng

SINGAPORE (Reuters) - Indian Oil Corp plans to expand capacity at its naphtha cracker in Panipat in northern India to 1.2 million tonnes per year (tpy) by 2019, said S Mitra, executive director of the refiner's petrochemical division.

The expansion would increase capacity of the cracker from about 850,000 tpy, Mitra told Reuters on Friday during a condensate and naphtha forum in Singapore.

The expansion of the cracker - which produces petrochemicals such as ethylene and propylene, the building blocks for plastics or polymers - would cost about $500 million, he said.

"Demand in (India) for polymers is growing," said Mitra, adding that about 90 percent of the polymers that IOC produces is for domestic consumption.

The Panipat cracker uses naphtha from nearby refineries, including IOC's own Mathura and Haldia plants, as its feedstock. This will continue even after its expansion.

IOC's new 300,000 barrels-per-day (bpd) Paradip refinery will not have any surplus naphtha as it is built to maximise output of gasoline at about 3.5 million tonnes a year (81,000 bpd), Mitra said.

(Reporting by Seng Li Peng; Editing by Tom Hogue)