State-run Indian Oil Corporation (IOCL) board approved an integration plan for its petrochemical and lube facilities at its Gujarat refinery at an estimated cost of Rs 17,825 crore to boost its capacity to produce petrochemicals. The Gujarat refinery upgrade is expected to be completed in 42 months.
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.
Addressing the media after the company’s 61st annual general meeting, IOC chairman SM Vaidya said IOCL’s net profit fell by 47 per cent 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 intention is to increase petrochemical intensity to insulate ourselves from the vagaries of auto fuel margin cracks and guarantee better refining margins,” he added.
“We are also reworking the demand supply dynamics and will review all our greenfield expansion projects,” Vaidya said. The company, however, does not plan to revise its planned capital expenditure (capex) for the current financial year. He added that the firm is on track to achieve the capex of over Rs 26,000 crore.
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.