Indian Oil Corporation Ltd (IOCL) is set to invest a massive Rs 1 trillion in petrochemical projects over the next five to six years, aiming to significantly boost its petrochemical intensity and production capacity amidst India's growing domestic demand and ambition to become a global refining hub.
Key Points
- Indian Oil Corporation Ltd (IOCL) plans to invest Rs 1 trillion in petrochemical projects over the next five to six years.
- The investment aims to boost petrochemical intensity from 6.5 per cent to 16 per cent and increase production capacity from 4.3 mtpa to 13 mtpa by 2030.
- IOCL's capital expenditure will primarily focus on petrochemicals and renewable energy, targeting 18 gigawatts of renewable power capacity.
- Other state-run refiners like BPCL and HPCL are also expanding refinery capacities with a strong focus on petrochemical production.
- India seeks to raise its refining capacity from 260 mtpa to over 300 mtpa to become a global refining hub.
India's largest refiner, Indian Oil Corporation Ltd (IOCL), plans to invest about Rs 1 trillion in petrochemical projects over the next five to six years, the company’s management said during an investor call on Monday.
The move is aimed at increasing petrochemical intensity — the share of crude oil converted into chemicals — from the current 6.5 per cent to 16 per cent, it added.
Strategic Investment in Petrochemicals
“We generally have capital expenditure (capex) of Rs 30,000 crore to Rs 40,000 crore every year.
From next year, we have several petrochemical projects where we will deploy our capex.
The estimated cost of these projects is around Rs 1 trillion over the next five to six years.
These projects are at various stages of approval,” said Anuj Jain, director (finance), IOCL.
As India ramps up refining capacity to meet domestic demand, refiners are expected to step up petrochemical production.
IOCL aims to increase its petrochemical production capacity from the current 4.3 million tonnes per annum (mtpa) to 13 mtpa by 2030.
India, which has the world’s fourth-largest refining capacity, plans to raise it from the current 260 mtpa to over 300 mtpa as it seeks to emerge as a global refining hub.
Expanding Refining and Petrochemical Capacities
State-run refiners, including Indian Oil, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), are expanding the capacity of existing refineries while also setting up greenfield refinery-cum-petrochemical complexes.
The greenfield refineries under construction have a stronger focus on petrochemical production. BPCL’s upcoming refinery in Andhra Pradesh is targeting a petrochemical intensity index (PII) of 35 per cent, while HPCL’s greenfield refinery at Barmer in Rajasthan is designed with a PII of 26 per cent.
Capacity additions at other refineries across the country are also aimed at boosting petrochemical production.
Focus on Renewables and Future Growth
“At IOCL, we are now focusing on petrochemicals as there is huge demand in the country.
"Going forward, renewables will also be a key area of investment. We have a target of achieving 18 gigawatts of renewable power capacity over the next three to four years.
"Renewables and petrochemicals will account for the bulk of our capex.
"In addition, we will invest in pipelines, biogas, sustainable aviation fuel, green hydrogen and shipping," Jain said.
Meanwhile, a joint venture between Indian Oil and Chennai Petroleum Corporation Ltd is reconfiguring the upcoming greenfield refinery at Nagapattinam in Tamil Nadu to increase the project's petrochemical output.
