GN Bureau | January 11, 2016
Indian Oil Corp aims to invest Rs 40 billion ($600 million) in upgrading its newest refinery in Paradip, Odisha, after the government decided to fast track the introduction of road vehicle fuels which are compliant with Euro VI emission standards to April 2020. The refinery is IOC’s most advanced plant that can process the heaviest and dirtiest crude oil available at a cheaper rate.
The 300,000 barrels per day refinery, which was commissioned last year, was designed to produce Euro IV and Euro V-compliant fuels. But the decision to bring forward the introduction of Euro VI fuels to combat rising pollution requires installation of some new units and upgrades of existing ones.
IOC needs to add facilities like Isomerisation, Diesel Hydrotreater and a Hydrogen units to produce Euro VI compliant fuels at the Paradip refinery.
G S Singh, executive director for technical operations at the refinery, told reporters that the IOC would commission a reformer, and vacuum gas oil hydrotreater this month, and an alkylation unit next month.
The refinery is expected to run at up to 60 percent capacity in the current fiscal year to March 31 as some units have yet to come online. The crude processing capacity could rise to 80 percent once other new units are commissioned, Singh said.
It will operate at full capacity from the fiscal year 2017/18, when its gross refining margins could go up significantly to $12-$14 per barrel, Singh said.
India’s fuel demand is rising and the International Energy Agency has said the country could become the most important driver of energy demand growth in the world in the years to come.
Paradip refinery will mainly cater for markets in eastern and southern India, currently fed by fuel sourced from other local refiners and imports.
Meanwhile, Indian Oil has tied up with trucking and logistics start up Fortigo, which will help it address issues related to ferrying of its fuel by small truck owners. Fortigo is funded by various venture capitalists including Nandan Nilenkani.
Fortigo will "provide technology-based solutions to truck owners for managing their inventories and planning their operations and journeys effectively to save time and reduce transportation costs", IOC said in a statement.
A large part of fuels like petrol, diesel and LPG produced by IOC are moved from its refineries to consumption centres in trucks.
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