Indian Oil’s Gujarat refinery at Koyali is expected to start producing polypropylene by the end of the current financial year, with the 500,000-tonne-a-year unit aimed at meeting part of India’s growing domestic requirements and substituting imports.
Gujarat Refinery’s executive director Biplob Biswas said in Vadodara on Wednesday that the polypropylene plant is part of the refinery’s expansion to 18 million tonnes per annum (MMTPA) of crude processing capacity.
The refinery can process 18 MMTPA of crude at the primary-processing stage but is yet to reach the expanded capacity on a sustained basis because the secondary processing facilities required to convert the crude streams into finished products are still being completed. Biswas said that the full 18 MMTPA capacity is expected to be achieved by the end of FY27. The refinery is currently operating at around 13.7 MMTPA capacity.
The polypropylene project will add a petrochemical product to what remains predominantly a fuel refinery. The 500 KT unit will use propylene generated by Indian Oil’s in-house INDMAX technology. The INDMAX unit, with a capacity of about 2.75 million tonnes a year, is designed to maximise propylene yield at around 18% of feed, compared with roughly 6-10% from a conventional fluid catalytic cracking unit, Biswas said.
Of the additional processing capacity, around 500 KT of material that could otherwise have ended up as fuel will instead be converted into polypropylene. Similarly, about 270 KT has been added as LOBS, also drawing on streams that would otherwise have gone into fuels. Diesel will continue to account for the largest share of the refinery’s product slate.
India remains a net importer of polypropylene despite additions to domestic capacity, Biswas said. While the Koyali unit will contribute 500 KT towards import substitution, the country will continue to require imports. He also pointed to the relatively low per capita consumption of plastics in India compared with the global average, indicating room for demand growth.
The expansion has already seen two grassroots units commissioned this year—a vacuum distillation unit and a lube oil base stock (LOBS) unit. The propylene and polypropylene facilities are among the remaining blocks, with construction of the polypropylene unit already at an advanced stage.
Despite the long execution period, Indian Oil has not seen a cost overrun on the project so far, Biswas claimed. The project had earlier been estimated at around Rs 17,500 crore, with subsequent reports putting the cost closer to Rs 19,000 crore. Biswas disputed the increase, saying the company generally uses contracts with price-elasticity provisions that protect it from escalation, while delay-related risks are borne by the construction side.
The refinery is also gradually expanding its portfolio of speciality products. It has begun producing NOBS, a speciality chemical, and started exporting the product within two weeks of commencing production, according to Biswas. Koyali also produces niche products including aviation gasoline AVGAS 100LL, for which Indian Oil is the sole domestic producer, and supplies specialised fuels to the defence sector.
Biswas indicated that this diversification will become increasingly important over the next decade. Indian fuel demand, he said, could plateau in about 10-12 years and subsequently decline as alternative fuels gain ground. Consequently, projects under various stages of approval are expected to move the refinery further toward petrochemicals and speciality products rather than simply adding more fuel capacity.
The refinery is also operating a hydrogen dispensing facility using hydrogen produced at the site and is testing hydrogen buses in collaboration with Tata Motors. Four buses have completed their run-in period in Delhi and are operating in the cantonment and airport areas.