IOC to add new chemical plant at Panipat refinery
Indian Oil Corp. Ltd. (IOC) let a contract to McDermott International Ltd. to provide project management consultancy (PMC) for a new petrochemical production unit to be installed at the operator’s 15-million tonnes/year (tpy) integrated Panipat refining and chemical complex in Haryana, India, north of New Delhi.
As part of contract, McDermott will deliver PMC services covering front-end engineering and design, review of engineering activities, construction supervision services, startup assistance, precommissioning, commissioning, performance guarantee test run, and project closure for the proposed addition of a maleic anhydride (MAH) unit at the refinery, the service provider said on May 24.
Alongside production of MAH that will be used for manufacturing of products such as polyester resins, surface coating plasticizers, agrochemicals, and lubricant additives, the new plant also will produce tetrahydrofuran (THF) used for adhesives and vinyl film, as well as butanediol (BDO) used in engineering-grade plastic and biodegradable fibers, according to McDermott.
While the service provider confirmed work on the project will be executed from its operations in Gurugram, India, McDermott disclosed neither the value nor duration of the PMC contract.
Project background
On Nov. 1, 2021, IOC confirmed its approval of the MAH plant’s installation at Panipat at an investment of 36.81 billion rupees ($491.89 million), the operator said in a release.
Scheduled to be commissioned in 54 months from the November 2021 investment approval, the MAH plant was to have the capacity to produce:
- 120,000 tpy of MAH.
- 20,000 tpy of 1,4-BDO.
- 16,000 tpy of THF.
Alongside its use in adhesives and vinyl films, THF production from the unit is also intended to help accelerate the growth of India’s pharmaceutical industry, IOC said.
The proposed Panipat plant’s combined production of MAH, BDO, and THF—most of which India now imports—would reduce the country’s import dependence to save $150 million in associated foreign exchange costs, said S.M. Vaidya, IOC’s chairman.
More importantly, Panipat’s proposed MAH plant comes as part of IOC’s ongoing program of establishing a more robust petrochemical presence, complementing the operator’s ongoing project to increase crude processing capacity at the site by 10 million tpy to 25 million tpy, according to Vaidya.
Designed to improve operational flexibility of the refinery to help meet domestic energy demand, the Panipat capacity expansion project—which will include installation of a polypropylene unit—would also increase production of petrochemicals and value-added specialty products to elevate margins and derisk IOC’s companywide exposure to its conventional fuel business via addition of new units at the integrated olefins and aromatics complex (OGJ Online, Sept. 8, 2022).
“This [MAH plant] will consolidate [IOC’s] basket of niche products and increase the Lube and Petrochemical Integrity Index of Panipat refinery to more than 15% after the refinery expansion plan is implemented,” Vaidya said.
Budgeted at an estimated cost of 329.46-billion rupees, the Panipat capacity expansion remains scheduled for commissioning by September 2024.
Robert Brelsford | Downstream Editor
Robert Brelsford joined Oil & Gas Journal in October 2013 as downstream technology editor after 8 years as a crude oil price and news reporter on spot crude transactions at the US Gulf Coast, West Coast, Canadian, and Latin American markets. He holds a BA (2000) in English from Rice University and an MS (2003) in education and social policy from Northwestern University.
