Indian Oil Corporation to invest Rs 61,077 crore to build a petrochemical plant

As it intensifies its transition plan, the largest oil corporation in India, IOC, will invest Rs 61,077 crore in the construction of a petrochemical plant at Paradip in Odisha. Indian Oil Corporation (IOC) announced in a statement that its board has 'approved Stage-1 for the establishment of Paradip petrochemical complex at Paradip, Odisha, at an estimated cost of Rs 61,077 crore.'

The company stated that 'this mammoth project will be the largest-ever investment of Indian Oil at a single location,' however it did not provide a completion date.

This is a component of their transition strategy, which also includes increasing petrochemical intensity to help mitigate volatility. The fraction of crude oil that is transformed directly into chemicals used to manufacture plastic and other materials is referred to as petrochemical intensity.

Petrol, diesel, and other fuels are made from crude oil that is processed at refineries after being pumped out of the earth and from beneath the seabed. Bypassing the fuels, it can be processed to create petrochemicals.

IOC's petrochemical intensity, or the proportion of crude oil that is transformed into chemicals, is currently low at 5–6%. The business wants to increase it to between 10% and 12%.

In an interview with PTI last month, the company's chairman Shrikant Madhav Vaidya stated that the petrochemical intensity at the company's more recent refineries in Panipat, Haryana, and Paradip, Odisha, would be increased to 25%.

The transition to renewable energy sources like wind and solar, as well as lithium-ion batteries, from fossil-based systems of energy production and consumption, including oil, natural gas, and coal, is referred to as the energy transition. This change is projected to progressively reduce demand for gasoline and diesel, hence IOC is undertaking petrochemical projects in anticipation of that.

According to the company, the petrochemical complex at Paradip will include a large-scale cracker unit as well as downstream processing units for producing a variety of petrochemical products, including polypropylene (PP), high-density polyethylene (HDPE), linear low-density polyethylene (LLDPE), and polyvinyl chloride (PVC), which are the building blocks of various grades of plastics. Also, it will make it easier to produce specialty petrochemicals and compounds like phenol and isopropyl alcohol.

According to the announcement, the initiative will spur Paradip's PCPIR and Plastic Park's expansion.