Indian oil company planning $7.5B global investment

A basic element in the Indian Oil Corporation's (IOC) (Mumbai, India) strategy in quickly becoming a leading petrochemicals player in the domestic and global markets is the establishment of a stand-alone strategic business unit to market petrochemical products. The unit has five subgroups that are classified by product and function: linear alkyl benzene (LAB), PTAQ, polymers, logistics and exports. The first units to be established in the domestic market and abroad are in the LAB business. The state-controlled IOC is working to grow through the integration of its core business with opportunities available in the petrochemicals sector. The IOC and its subsidiaries own and operate 10 of the 19 refineries in India with a combined capacity of more than 1.2 million barrels per day (BBL/d), equivalent to 60.2 million tons per annum.

The company is projecting a turnover of $4.5 billion from petrochemicals by 2011-12 and is aiming to become one of the top three companies in the sector in Southeast Asia. To support these goals, the IOC plans to invest $7.5 billion in the sector over the next four years. In 2006-07, the company had revenue of $51 billion.

To achieve improved exploitation of the hydrocarbon value chain, feedstock for the projects will be provided by existing refineries. Following this strategy, the IOC is planning low-investment, high-value projects, such as methyl tertiary butyl ether and butene1 at its Gujarat refinery. There will also be a LAB plant in Gujarat and an integrated paraxylene-purified terephthalic acid plant at Panipat where a naphtha cracker complex with downstream polymer units is under construction for commissioning in 2009. A refinery and petrochemicals complex is also planned for the east location of Paradip. The IOC has signed a memorandum of understanding (MoU)with the Haryana State Industrial & Infrastructural Development Corporation for the development of a petrochemicals hub at Panipat.

In another major move in the Indian petrochemicals sector, the Gas Authority India Limited (GAIL) has signed an MoU with Reliance Industries Limited (Mumbai) to set up petrochemicals projects in gas-rich countries, such as Russia, and in the Middle East and Africa and to study opportunities in India and globally. GAIL has also signed an MoU with Russia's ITERA Oil & Gas to join in methane-based petrochemicals projects in Russia.

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