Indian Oil commits to invest Rs 24,000 crore in Gujarat refinery expansion

State-owned refinery, Indian Oil Corporation (IOC) on Monday has signed up an investment pact for adding petrochemical and lube plants to its previously announced plan to expand crude oil processing capacity at its Koyali refinery at Vadodara in Gujarat.

Expanding refining capacity by 4.3 million tonnes per annum to 18 million tonnes and adding plants to produce 500,000 tonnesper annum of polypropylene and 2,35,000 tonnes of lube oil base stock at the site would require a total investment of about Rs 24,000 crore, company officials said.

“Chief Minister of Gujarat, Vijaybhai Rupani and Union Minister of Petroleum and Natural Gas & Steel Dharmendra Pradhan presided over an MOU signing ceremony for ‘Investment Promotion’ between the Government of Gujarat and Indian Oil for setting up a Petrochemical and Lube Integration (LuPech) Project and Acrylics / Oxo Alcohol Project along with other infrastructure projects at Gujarat Refinery,” a company statement said.

The LuPech project will produce import substitutes like Lube Oil Base Stock (LOBS) and Polypropylene. The Acrylics/Oxo Alcohol Project at Dumad and Gujarat Refinery will manufacture value-added Butyl Acrylate, a key ingredient for paints, coatings, adhesives, textile chemicals, plasticizer industry, and other similar products.

The inclusion of the petrochemical-lube integration component comes as part of IOC’s strategy to create a building block for future production of niche chemicals with a potential to increase petrochemical and specialty products integration index on incremental crude throughput to improve margins.

“These projects will strengthen the Corporation’s readiness for venturing into petrochemical projects like PVC, Styrene, Acrylonitrile, Poly-Methyl Methacrylate and Ethylene Oxide in future. The Petrochemicals & Specialty products (Gr-II/III LOBS) integration index based on additional crude oil added under this project is estimated to be 20.7 per cent,” it said.

The refinery will be implementing India’s first hydrogen dispensing facility as a clean fuel initiative. This facility aims to fuel hydrogen buses plying between Vadodara and Sabarmati Ashram.

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