IndianOil to invest Rs.30 bn in Haldia Refinery

Jun 14, 2006, 15:17 GMT

Kolkata, June 14 (IANS) Haldia, the emerging chemical hub of West Bengal, received a boost with the Indian Oil Corp Ltd announcing investment of Rs.30 billion for expansion and setting up of new units at the Haldia refinery.

Petroleum Minister Murli Deora, who met West Bengal Chief Minister Buddhadeb Bhattacharya Tuesday, said: 'The expansion of the refinery will include setting up of a paraxylene and propylene recovery plant.'

Deora, during a stopover here on his way to Shanghai, said the IOC had already lined up investment of Rs.19 billion for producing Euro-III compliant fuel.

He said IOC was awaiting the Union Shipping Ministry's approval for 210 acres of land for expansion of the refinery, which would be complete within 24 months of land acquisition.

Apart from the refinery expansion, IOC's participation in the proposed chemical hub at Haldia also figured in his talks with the chief minister, Deora said.

Bhattacharya said IOC would be the lead investor in the proposed chemical hub at Haldia.

'It is a beginning, but I can say it is a good beginning,' the chief minister said after the talks with Deora, petroleum secretary M.S. Srinivasan and IOC chairman Sarthak Behuria.

'The state government has requested IOC to double the capacity of the Haldia refinery to 15 million tonnes. But it would be difficult to evacuate such a huge amount of production from there. We must have something where they can be utilised,' Srinivasan said.

IOC has linked the capacity increase to a leading role in Haldia Petrochemicals Ltd (HPL), in which it has 7.5 percent stake now. It wants to progressively increase its stake in HPL to eventually take over the management.

Srinivasan said IOC wanted to first step up its holding to a strategic level - 26 percent and above - and then develop majority stake, 51 percent and above.

In the HPL, two principal promoters West Bengal government and Chatterjee Group are locked in a bitter battle for control. The government has offered to buy out Purnendu Chatterjee.

Meanwhile, IOC's Rs.3.59-billion motor spirit quality improvement unit in the Haldia refinery has recently started production.

Haldia, which boasts of units of Tata Chemicals and Mitsubishi Chemical Company among others, is a major trade port near the mouth of the Hooghly river in West Bengal's East Midnapore district, about 50 km southwest of Kolkata.

© 2006 Indo-Asian News Service