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IOC may expand Haldia Refinery to 7.4 million tonnes
New Delhi, Dec 08: State-run Indian Oil Corporation (IOC) may expand its Haldia Refinery in West Bengal to 7.4 million tonnes from 6 million tonnes, IOC chairman M S Ramachandran said today.
New Delhi, Dec 08: State-run Indian Oil Corporation
(IOC) may expand its Haldia Refinery in West Bengal to 7.4
million tonnes from 6 million tonnes, IOC chairman M S
Ramachandran said today.
The proposed expansion may take place after construction
of a crude pipeline from east coast Port of Paradip in Orissa,
where IOC is building a new refinery and a single morring to
import crude oil, to its Haldia Refinery and to the Northeast.
"We are looking at the possibility of expanding the Haldia Refinery after construction of the pipeline," he told reporters here.
The Haldia Port, with a draft of only 9 metres, cannot handle very large crude carriers, forcing IOC to import crude oil in smaller vessels and paying higher freight.
The 700-km pipeline would substantially reduce IOC's cost of crude transportation to Haldia Refinery and the nearby Barauni Refinery, Ramachandran said.
Haldia and Barauni refineries already have a connecting crude pipeline in place. Construction of the Rs 1200 crore pipeline is expected to begin early next year after obtaining necessary environmental clearances, he said adding the project would be completed in 36 months.
Ramachandran said IOC would recommence work on the nine million tonne Paradip Refinery after Orissa government issues a notification restoring fiscal concessions for the project.
"We are targetting Paradip Refinery completion by 2009-10," he said.
The Orissa government had last month agreed to restore tax concessions it granted in August 1999 to the Rs 12,400 crore Paradip Refinery.
The state government will provide concessions in line with those offered by the Haryana government for Panipat Refinery, including deferring sales tax on refined products for 11 years and exempting crude oil from state entry tax. "We are yet to see the notification (of Orissa government restoring the fiscal concessions) and construction would begin only after that," Ramachandran said.
Earlier, the state had agreed on a five-year exemption on entry tax but IOC said that such a tax incentive would result in negative refinery margin.
After the notification, IOC will sign a MOU with Orissa government on year-wise physical and financial milestones for the refinery.
The refinery's viability had been under a cloud since February 2000 after the state withdrew the incentives it had offered in August 1999. The incentives were partially restored in July 2001 but those amounted to merely 32 per cent of the original concessions.
IOC had estimated that a deferment or exemption of sales tax by the Orissa government for 11 years would push the project's internal rate of return (IRR) to 10.33 per cent from current 2.56 per cent and the return on equity (ROE) to 12.26 per cent from the current 1.26 per cent.
Ramachandran said the company was looking at Orissa's request for advancing refinery's commissioning to 2008-09. "We have already moved its implementation from 2011-12 to 2009-10 and further advancement will have to be looked into after considering the demand-supply scenario." Bureau Report
"We are looking at the possibility of expanding the Haldia Refinery after construction of the pipeline," he told reporters here.
The Haldia Port, with a draft of only 9 metres, cannot handle very large crude carriers, forcing IOC to import crude oil in smaller vessels and paying higher freight.
The 700-km pipeline would substantially reduce IOC's cost of crude transportation to Haldia Refinery and the nearby Barauni Refinery, Ramachandran said.
Haldia and Barauni refineries already have a connecting crude pipeline in place. Construction of the Rs 1200 crore pipeline is expected to begin early next year after obtaining necessary environmental clearances, he said adding the project would be completed in 36 months.
Ramachandran said IOC would recommence work on the nine million tonne Paradip Refinery after Orissa government issues a notification restoring fiscal concessions for the project.
"We are targetting Paradip Refinery completion by 2009-10," he said.
The Orissa government had last month agreed to restore tax concessions it granted in August 1999 to the Rs 12,400 crore Paradip Refinery.
The state government will provide concessions in line with those offered by the Haryana government for Panipat Refinery, including deferring sales tax on refined products for 11 years and exempting crude oil from state entry tax. "We are yet to see the notification (of Orissa government restoring the fiscal concessions) and construction would begin only after that," Ramachandran said.
Earlier, the state had agreed on a five-year exemption on entry tax but IOC said that such a tax incentive would result in negative refinery margin.
After the notification, IOC will sign a MOU with Orissa government on year-wise physical and financial milestones for the refinery.
The refinery's viability had been under a cloud since February 2000 after the state withdrew the incentives it had offered in August 1999. The incentives were partially restored in July 2001 but those amounted to merely 32 per cent of the original concessions.
IOC had estimated that a deferment or exemption of sales tax by the Orissa government for 11 years would push the project's internal rate of return (IRR) to 10.33 per cent from current 2.56 per cent and the return on equity (ROE) to 12.26 per cent from the current 1.26 per cent.
Ramachandran said the company was looking at Orissa's request for advancing refinery's commissioning to 2008-09. "We have already moved its implementation from 2011-12 to 2009-10 and further advancement will have to be looked into after considering the demand-supply scenario." Bureau Report