CPCL advances plan for proposed Cauvery Basin grassroots refinery

Chennai Petroleum Corp. Ltd. (CPCL), a partly owned subsidiary of Indian Oil Corp. Ltd. (IOC), has revised its cost estimate and is now seeking to form a joint venture for setting up its previously proposed 9 million-tonnes/year Cauvery basin grassroots refinery at Nagapattinam in Tamilnadu, India (OGJ Online, Apr. 3, 2019).

In a June 3 meeting, CPCL’s board of directors recommended a proposal to IOC’s board for implementing the planned Cauvery basin refinery project, pending statutory approvals, through a JV at an estimated cost of 289.83 billion rupees (+/-10%), CPCL said in filings to India's BSE Ltd. and National Stock Exchange of India Ltd.

As part of the proposal, CPCL’s board also accorded in-principle approval for incorporation of JV structure under which IOC and CPCL each would hold a 25% stake, with the remaining 50% to be held by outside financial, strategic, or public investors.

Subject to necessary approvals, CPCL said it would invest up to 25 billion rupees in the project.

CPCL’s revised plan for moving forward with the proposed refinery follows its previously estimated total project cost of 274.5-274.6 billion rupees (±30%) in 2019 (OGJ Online, May 13, 2019).

Designed to help meet future energy needs of India’s Tamilnadu state, the planned Cauvery Basin project will involve dismantling of CPCL’s existing 1 million-tpy refinery at the site—which ceased operations on Apr. 1, 2019—for the new construction, according to the latest project documents from CPCL, the government of India, and Engineers India Ltd. (EIL), which completed a detailed feasibility report for the project.

The proposed grassroots refinery, if approved, will include the following major units and capacities:

• Combined crude-vacuum distillation unit; 9 million tpy.
• Naphtha hydrotreating unit; 1.5 million tpy.
• Isomerization unit; 570,000 tpy.
• CCR unit; 625,000 tpy.
• Diesel hydrotreating unit; 5 million tpy.
• Vacuum gas oil hydrotreating unit; 3 million tpy.
• INDMAX FCC unit; 2.43 million tpy.
• INDMAX FCC gasoline hydrotreating (desulfurization) unit; 700,000 tpy.
• OCTAMAX unit; 125,000 tpy.
• Polypropylene unit; 475,000 tpy.
• Delayed coking unit; 2.5 million tpy.
• Hydrogen generation unit; 98,000 tpy.
• Sulfur recovery unit (SRU) with independent tail-gas treatment unit (TGTU), Train 1; 432 tonnes/day.
• SRU with independent TGTU, Train 2; 432 tonnes/day.

EIL is currently carrying technology evaluation and process licensor selection for the planned refinery’s process units, CPCL said in its latest annual report to investors.

A definitive timeframe for the project, however, has yet to be disclosed.