New Delhi: The Board of Directors of Indian Oil Corporation (IOC) has accorded its approval to Panipat Refinery expansion plan on Friday, the state-run oil marketing company told the stock exchanges in a regulatory filing. The project will entail an investment of Rs 32,946 crore and will involve expansion of the capacity of IOC's Panipat Refinery from the current 15 MMTPA to 25 MMTPA, Indian Oil said. "… it is hereby notified that the Board of IndianOil at its meeting held on 26th February 2021 has accorded its approval for capital investment for capacity expansion of Panipat Refinery from 15 MMTPA to 25 MMITPA along with installation of Polypropylene Unit and Catalytic Dewaxing Unit at an estimated cost of Rs 32,946 Crore," said the regulatory filing.
The expansion plan will increase the capacity of Indian Oil's Panipat Refinery from 300,000 barrels per day to 500,000 barrels per day. "The project is expected to be commissioned by September 2024," said IOC.
Explaining the rationale behind the expansion project, Indian Oil said that the Panipat Refinery expansion project would not only improve the ability of the state-run refiner to meet domestic fuel demand but will also enhance its petrochemical intensity which will allow the company to de-risk its fuel business from the vagaries of the oil market. "The capacity expansion would improve the operational flexibility of the Refinery to meet the domestic energy demand and would also enhance the petrochemicals intensity. The increased production of petrochemicals and value added specialty products would not only improve the margins but also de-risk the conventional fuel business of the company," said Indian Oil.
Indian Oil Chairman and Managing Director SM Vaidya had said in September 2020 that the company is reviewing its refinery expansion plans in the backdrop of a rise in the usage of cleaner fuels and is also looking to leverage its growing petrochemical operations to shield its balance sheet from the vagaries of the oil market.
(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)