IOC to set up billion-dollar unit in TN

Written by Energy Bureau | New Delhi, Jul 30 | Updated: Jul 31 2007, 05:05am hrs
The countrys largest oil refining and marketing major-Indian Oil Corporation (IOC) said on Monday that it plans to set up a multi-billion dollar export-oriented refinery unit at Ennore in Tamil Nadu.

While the details of the project are still being worked out, chairman and managing director of IOC Sarthak Behuria said it will be a mega refinery-cum-petrochemical complex at Ennore along with a liquefied natural gas (LNG) import terminal. In addition, IOC is also planning to put up a liquefied petroleum gas (LPG) import terminal at Ennore.

Following non-availability of LNG under long term contracts, IOC has decided to put the LNG terminal project on the backburner as of now. However, the board of IOC on Monday approved its proposal to start with the execution of the LPG import terminal at Ennore at a cost of Rs 326 crore. The project will be implemented by IOC and its joint venture partner Petronas of Malaysia through the JV company-Indian Oil Petronas Pvt Ltd (IPPL). The LPG import terminal project will be executed with a debt-equity ratio of 1:1.

At present, there are two major LPG import terminals in the southern region including a 600 tmtpa terminal at Mangalore on the western coast owned by HPCL and a 400 tmtpa at Vizag on Eastern Coast, presently under HPCL contract. As indicated by HPCL, the capacity of Vizag import terminal is expected to increase to about 600 tmtpa with commissioning of LPG Cavem storage expectedly by July, 2007. With this, the total rated LPG import capacity in southern region shall go up to 1200 tmtpa.

The overall deficit in southern region, which at present is about 1600 tmtpa, will reduce to about 460 tmtpa by 2011-12 due to the projected increase in the LPG production mainly at Vizag and Mangalore Refineries. However, the LPG deficit in the state of Tamil Nadu during the XI Plan period is projected as ranging from (-)616 tmtpa to (-)628 tmtpa considering a growth rate of about 4%. Further, IOCs Paradip Refinery in Orissa is expected to be commissioned during 2011-12, wherein estimated LPG production will be about 800 tmtpa. Out of this about 400 450 tmtpa of LPG will be required to be moved towards southern region after meeting the demand in eastern region.

The most economical mode of transportation of this surplus LPG at Paradip will be coastal mode for which suitable LPG terminal will be required for receiving the LPG and onward transportation to inland bottling plants in southern region. The proposed LPG terminal at Ennore will readily serve this purpose.

Further, LPG import terminal at Ennore is required to meet our immediate requirement also by way of imports to meet the demand till the time Paradip and Cuddalore refineries are commissioned, said a senior IOC official.