The development is in line with the IOCL’s strategy to facilitate petrochemical integration into its refinery expansion plans, as this group of products is touted to be the biggest driver of oil demand in the long term.
The firm plans to build a Rs 1,970-crore textile manufacturing project at Bhadrak in Odisha.
State-run Indian Oil Corporation (IOCL) will invest Rs 17,825 crore in its Gujarat refinery to boost its capacity to produce petrochemicals, the company said on Monday. The development is in line with the IOCL’s strategy to facilitate petrochemical integration into its refinery expansion plans, as this group of products is touted to be the biggest driver of oil demand in the long term. The Gujarat refinery upgrade is expected to be completed in 42 months.
“The intention is to increase petrochemical intensity to insulate ourselves from the vagaries of auto fuel margin cracks and guarantee better refining margins,” IOCL chairman SM Vaidya said on Monday while addressing the media after the company’s 61st annual general meeting. IOCL net profit fell 47% annually to Rs 1,910.8 crore in the quarter ended June 30, mainly due to inventory losses stemming from fluctuations in global oil prices. The petrochemicals business is expected to act as a cushion to its low-margin refinery business.
Vaidya added that though the company was revising the long-term demand scenario after the coronavirus crisis, it was on track to spend the Rs 26,233-crore capex earmarked for FY21. The company’s board has also recently approved the implementation of an integrated para-xylene (PX) and purified terephthalic acid (PTA) complex project at its Paradip refinery in Odisha, which would require an estimated investment of Rs 13,805 crore. The project is expected to be completed by 2024.
In the wake of a shift in energy usage patterns to address climate change and global warming, IOCL has been investing across the energy value chain in diverse areas such as renewables, electric mobility, bio-fuels and hydrogen. It has set up EV-charging and battery-swapping facilities in 76 and 11 retail outlets, respectively. The company also intends to set up a metal-air, battery-manufacturing facility and develop fuel cells and indigenous hydrogen storage solutions.