Indian Oil’s Petrochemical initiatives at Paradip

&
Downstream Opportunities

IOCL PetChem Conclave – 12 Feb 2015

Agenda

* Background: PCPIR
* Overview: Paradip Refinery
* Potential Feedstock for downstream
Industry
* Investment plans in petrochemicals
* Challenges & enablers
* Summary & Conclusion

2
Agenda

* Background: PCPIR
* Overview: Paradip Refinery
* Potential Feedstock for downstream
Industry
* Investment plans in petrochemicals
* Challenges & enablers
* Summary & Conclusion

3
Background: PCPIR

Petroleum, Chemicals and Petrochemicals sectors are major contributors of India’s

economic growth and Regional development.

 Setting up PCPIRs provide a major impetus to the Refining, Petrochemicals &

Chemicals industries, with an integrated and sustainable approach thereby extracting
synergies.

 PCPIRs would reap the benefits of co-sitting, networking and greater efficiency
through the use of common infrastructure & support services.

“Cost Advantage” through economy of scale, Integrated approach, infrastructure

sharing and support services etc is the key differentiator for investment in PCPIRs.

 Each PCPIR would have a refinery/Petrochemical feedstocks company as an Anchor

Tenant. IndianOil is an Anchor tenant for PCPIR-Paradip.

Paradip Refinery Complex will serve feedstocks to the downstream Petrochemicals &
Chemicals industries in PCPIR-Paradip.
Agenda

* Background: PCPIR
* Overview: Paradip Refinery
* Potential Feedstock for downstream
Industry
* Investment plans in petrochemicals
* Challenges & enablers
* Summary & Conclusion

5
Overview: Paradip Refinery

 Refinery Capacity: 15 MMTPA crude oil processing

 A grass-root coastal refinery at Paradip

 Major primary & secondary units: Atmospheric & Vacuum units, Diesel
Hydrotreating Unit, Fluidized catalytic cracking unit, Alkylation unit, Catalytic Reforming
unit, DCU, Propylene recovery unit, Sulfur recovery unit etc.

 Captive Power Plant: 360 MW

 Commissioning Schedule: Q 1 2015 onwards in phased manner

 A FCC unit (Indmax-Technology by IOC R&D), of 4.2 MMTPA capacity is under

installation at Paradip.
Agenda

* Background: PCPIR
* Overview: Paradip Refinery
* Potential Feedstock for downstream
Industry
* Investment plans in petrochemicals
* Challenges & enablers
* Summary & Conclusion

7
Paradip Refinery: Product profile

Feedstock Capacity (KTA)

Crude Oil 15000
Products Capacity (KTA)
LPG 870
Ethylene Potential 200
Propylene Potential 700
MS 3400
ATF/ SKO 1200
Diesel 5650
Pet coke 1300
Sulfur 250
Internal Fuel & Loss 1430
Total Products 15000
Feedstock for Chemicals
Potential Feedstock

Propylene from cracked LPG ex FCCU

Ethylene from Offgas stream ex FCCU

 Petoke : 1300 KTA

Sulfur : 250 KTA

Agenda

* Background: PCPIR
* Overview: Paradip Refinery
* Potential Feedstock for downstream
Industry
* Investment plans in petrochemicals
* Challenges & enablers
* Summary & Conclusion

10
Poly Propylene Project at Paradip
 700 KTA Polypropylene (PP) plant envisaged based on Propylene from FCCU LPG

Investment approval: March 2014

Project schedule: 42 Months

 Expected completion: 2017

 Estimated investment : USD 500 MM

 Project Status and Milestones:

 Project Management Consultant (PMC) on Board

 Site Enabling work (Geo- Tech Investigation) : In progress
 Execution Agency award - Target : Feb’15
Poly Propylene (PP): Opportunities for downstream
unit at PCPIR, Paradip

 Following downstream Plastic Processing Industry can be set up in PCPIR Paradip

based on Polypropylene:

Injection Molding Products: Furniture, House wares, Material Handling Crates, etc.

BOPP Film: Flexible packaging, Adhesive tapes

Raffia: Cement Fertilizer bags, Food grain, Sugar packaging

Fiber & Filament: Shopping Bags, Straps & Ropes, medical disposable

TQPP Film: Textile packaging, Confectionery packaging, General purpose Packaging.

Thermoforming: Disposable cups & Containers

Downstream processing industries based on Poly
Propylene (PP) in Odisha

Investment Potential in Processor Units : Rs 1200 Crore

Direct Employment : ~ 7000

Indirect Employment Opportunities in Logistics & Support Services

Other Economic Activities

Ethylene Derivative Project at Paradip

 Post implementation of PP unit at Paradip, Offgas from FCC unit will have a potential of
220 KTA ethylene.
 Feasibility of various ethylene derivatives have been examined:

 Based on techno-commercial feasibility, an ethylene glycol plant of capacity 325 KTA is

planned.

 Technology selection & DFR stage

 Estimated investment : USD 600 MM (includes ERU)

 Expected completion: 2019

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Ethylene Glycol: Opportunities for downstream unit at
PCPIR, Paradip
Mono ethylene glycol is the main ingredients for Polyesters chips fibers, PET bottle grade
chips, PET film grade chips and polyester industrial yarn.
 The non polyester applications of ethylene Glycols are in antifreeze, coolants, paint
formulations, wire enamels, acrylic binders, alkyed resins, other chemicals etc.
 Currently, Eastern region is not having Ethylene Glycol capacity. Consumption of
ethylene glycols is the lowest in eastern region.
PX-PTA Complex at Paradip

 Feasibility study of Paraxylene: 1200 KTA and Purified terepthalic Acid (PTA) : 1200 KTA
is in progress.

Continuous catalytic reforming unit (CCRU), front end of PX complex is already under
installation at Paradip.

 PTA is the feedstock for manufacturing of Polyesters chips fibers, PET bottle grade
chips, PET film grade chips and polyester industrial yarn.

 With the availability of feedstocks of PTA & MEG at Paradip, an opportunity exists for
setting up polyester plants and develop textile hubs in PCPIR.
 Estimated capex : USD 1.5 Billion
 Expected completion : 2020

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Polyester & Textile Hub

 With availability of MEG & PTA at Paradip, potential exists for development of polyester
lines & textile hubs.

 Presently, polyester lines predominantly in Western region.

 Potential for investment of Rs 2500 Cr with direct employment potential of 1500.

 Further downstream industry till finished fabric can mushroom in the form of textile
weaving, knitting & processing industry.

 Reliable power, infrastructure & other incentives would help in developing downstream
industry.

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Petcoke Gasification & Downstream

 Petcoke Availability: Paradip : 1300 KTA

Haldia : 500 KTA

 Total Petcoke Availability in eastern region : 1800 KTA.

Techno-economic studies is in progress for gasification of the petcoke and utilization of

syn gas in production of Ethanol at Paradip. The estimated Capex USD 2.5 billion.

The project is conceptualized in Joint Venture.

Ethanol will predominantly be blended with Petrol.

 Availability of Ethanol at Paradip will provide an opportunities to set up derivative plants

in PCPIR.
 Ethanol – market applications

Potable
Alcohol Industrial Blending
alcohol in MS

• Bio and synthetic • Bio and

• Bio ethanol
ethanol synthetic ethanol

 Solvents in Pharmaceuticals
 Coatings/inks for food/paper packaging
 Detergents/cosmetics/mouthwash/lotions 19
Sulphur Availability at Paradip

 Sulfur Availability : 250 KTA.

 Sulfur used in the downstream industries. The major consumers are

IFFCO Paradip & Paradip phosphates in the region.

 Usage: The major consumption of sulfur in the production of Sulfuric

Acid. Other application of sulfur is in Dye Stuffs, Paper, Explosives,
Pharma, Rubber Vulcanization etc.

 Potential for setting up Sulfuric Acid industry.

Agenda

* Background: PCPIR
* Overview: Paradip Refinery
* Potential Feedstock for downstream
Industry
* Investment plans in petrochemicals
* Challenges & enablers
* Summary & Conclusion

21
Challenges in Developing Petrochemicals units at
Paradip:
The major constraints in developing Petrochemical projects are:

High Capex.
High volatility in international prices with uncertainty & low margins.

High energy costs (Fuels) in the country resulting in higher Opex.

Petrochemical industry is mainly located in Western region, thereby additional costs
for delivering the products to the market place till local market develops.
Enabling factors in Developing units at Paradip:

PCPIR would require enabling factors for its establishment . The enabling factors are:

Good Infrastructure

Land

Feedstock & natural resources.

Secured supply of power & utilities

Common effluent treatment

Linkages to existing demand centers

Investment climate & special fiscal incentives

Agenda

* Background: PCPIR
* Overview: Paradip Refinery
* Potential Feedstock for downstream
Industry
* Investment plans in petrochemicals
* Challenges & enablers
* Summary & Conclusion

24
 To summarise …..
 Based on experience of IPCL, & other PC complexes, PCPIR would be major growth
enabler for chemical industry.
International hubs (Jurong, Al Jubail, Yanbu, Antwerp etc) are success stories.
 In the changing Petchem scenario wrt feedstock / fuel costs, and increased regional
competition, it is imperative to leverage strengths.
 Pursuing refinery – Petchem integration would be way forward for anchor investors.
 Based on preliminary interaction, downstream industry players expect reliable power,
common infrastructure, suitable incentives schemes to encourage them to put up
facilities in the Eastern Region.
 Govt support is essential for growth of PCPIR. To facilitate the Investment Govt may
consider support by way of suitable financial/tax incentives.
Thanks !!