Our automation strategies have got a boost in last one year: Shrikant Madhav Vaidya, chairman, Indian Oil Corp

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April 03, 2021 4:00 AM

Pushing renewables and alternative fuel options are thus key to our agenda. Our R&D establishment has been exploring solutions for clean, renewable energy. In this context, hydrogen has great potential to emerge as the most sustainable fuel of all.

Shrikant Madhav Vaidya, Chairman, Indian OilShrikant Madhav Vaidya, Chairman, Indian Oil

The Indian Oil Corporation managed to run its refineries at optimal levels and ensured retail fuel outlets had sufficient supplies during the Covid-19 crisis. Shrikant Madhav Vaidya, chairman, tells FE’s Anupam Chatterjee the company is adapting to new market realities through petrochemicals integration in its refineries and scale-up of renewables and other alternative fuel options. Excerpts:

Petrochemical integration was a part of your refinery expansion plans. How much progress have you made on that front? Do you expect petrochemicals to be a significant driver of oil demand in the long-term?
There is a growing consensus that petrochemical integration is the way forward for the refining sector. Our focus on Crude-To-Chemicals is part of an effort to derive maximum value from the hydrocarbon chain. We believe it will help unlock the huge potential for the petrochemical sector. It will also allow us to hedge against cyclical performance with better returns and the benefits of integrated utility management.

Higher refining capacity should improve the availability of petrochemical feedstock in the future. With this in mind, Indian Oil is expanding its petrochemicals capacity by more than 70% from the present 3.2 million tonne a year. We plan to enhance our petrochemical integration to 14-15% by 2030.

In the long term, the focus would be on capacity augmentation, overseas expansion, and entry into niche petrochemicals and greater forward integration with textiles. We are consolidating our polymer portfolio by setting up new Polypropylene units at Barauni and in Gujarat.

Our upcoming Butyl Acrylate plant in Gujarat will mark our entry into the speciality chemicals segment. To cater to the paint & adhesive industry, new plants for Ethylene Glycol and PTA (Purified Terephthalic Acid) are being set up at Paradip. Polyester yarn and fibre production at Bhadrak in Odisha using PTA and Mono Ethylene Glycol as feedstock will help in downstream integration with the textile industry.

Since Indian Oil’s refineries use more than 2 million metric tonne of gas annually, and most of your units are within 300 km of gas injection points, what impact will the recent gas pipeline tariff rationalisation policy have on the company?
Seeking to boost gas consumption, the Petroleum and Natural Gas Regulatory Board (PNGRB) has notified a new tariff structure for 14 natural gas pipelines. We will assess its impact on our business once this structure comes into effect. Our refineries at Mathura, Panipat and in Gujarat, and our subsidiary CPCL- Chennai use RLNG.

With the development of the National Gas Grid and commissioning of the Dhamra LNG Terminal on the east coast, our refineries at Barauni, Haldia, Paradip, Guwahati and Bongaigaon should also start consuming RLNG in the next 2-3 years.

This would see Indian Oil’s captive consumption increasing to nearly 8 MMTPA by 2025. All in all, the refinery sector would play a major role in boosting gas consumption in the country, as the government seeks to do.

IOCL targets developing fuel cells for green mobility solutions and indigenous hydrogen storage solutions, having used hydrogen generation technologies from global majors across its refineries. Could you share your plans on the alternate energy front?
As an oil sector major, Indian Oil wants to leverage the new opportunities that have arisen in the energy domain. This entails widening the energy basket, with bioenergy and renewables being tapped for overall growth. I firmly believe that each energy form has a role to play in meeting India’s growing needs.

Pushing renewables and alternative fuel options are thus key to our agenda. Our R&D establishment has been exploring solutions for clean, renewable energy. In this context, hydrogen has great potential to emerge as the most sustainable fuel of all.

The use of hydrogen across sectors is witnessing a rise globally, though most of it serves as a feedstock for chemical and petrochemical industries at present. Our refineries, which have hydrogen generation units, can be used to produce and supply the fuel to meet future demand.

Indian Oil’s R&D Centre has already emerged as a pioneer in hydrogen research in the country. Our HCNG experiment in Delhi, as part of which we are plying 50 CNG BS-IV buses on HCNG fuel, is progressing well.

Further, with the support of the MoPNG, Indian Oil is setting up 1-tonne-per-day pilot plants based on four innovative hydrogen production technologies. We would also be operating 15 fuel cell buses in the Delhi-NCR region. We recently signed a statement of intent with Greenstat, a Norwegian company, to set up a Centre of Excellence on Hydrogen (CoE-H) in the country and accelerate the shift from fossil fuels to renewable energy.

As for other alternative energy sources, we are one of the first Oil Marketing Companies to invest in solar and wind projects across India. Leveraging the policy support for biofuels, we are expanding in a big way into bioenergy. Compressed Biogas (CBG), 2-G Ethanol, waste-to-fuel and used-cooking-oil-to-biodiesel are the areas Indian Oil is investing in. Under the SATAT scheme, the company has begun marketing CBG under the “IndiGreen” brand, being the only oil and gas company to do so. We are also seeking partnerships to develop battery technology and get into cell manufacturing.

Indian Oil already offers electric vehicle charging and battery swapping facilities at select retail outlets and intends tapping this high-potential segment.

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