IndianOil board approves $2.35bn Gujarat refinery expansion


Oil marketing company IndianOil’s board has approved the first stage of expansion of the Gujarat refinery at an estimated cost of Rs150.34bn ($2.35bn), aimed at meeting the demand in the region.

Once the expansion is completed, the plant will have an enhanced crude oil processing capacity of 18 million metric tonnes per annum (mmtpa) up from the existing 13.7mmtpa.

Under the expansion project, the company will execute, in 2021, a new 15mmtpa atmospheric vacuum unit (AVU) set to replace the existing four atmospheric units and two vacuum units at the refinery, which are now rendered small and energy inefficient.

IndianOil chairman Sanjiv Singh said: “Gujarat Refinery, which went on stream in October 1965 as a 1mmtpa unit, heralded India’s capabilities to build refineries on its own. In the same vein, we are now proposing to incorporate IndianOil's own R&D technologies for both IndMax and kerosene hydro-desulphurisation units.

"Gujarat Refinery, which went on stream in October 1965 as a 1mmtpa unit, heralded India’s capabilities to build refineries on its own."

“The IndMax unit is being designed for high yields of propylene, for which a polypropylene (PP) unit of 420mmtpa capacity is being set up as a downstream petrochemical unit as part of the refinery configuration.”

Keeping in view the volatility in the fuel supply / demand scenario in the future, the company is planning to integrate the refinery with downstream petrochemical units.

The board also gave its go-ahead for acquiring up to 50% equity in GSPL LNG, which is commissioning a 5mmtpa LNG terminal at Gujarat’s Mundra port in the fourth quarter of this year at an estimated cost of Rs50.4bn ($789m).

GSPL LNG is a joint venture of state-owned Gujarat State Petroleum (GSPC) and Adani Enterprises (AEL).

IndianOil is planning to enhance the combined capacity of its 11 group refineries from 80.7mmtpa to more than 100mmtpa in the next five years through brownfield expansions.