The Indian state-owned oil refiner, Indian Oil Corporation Ltd (IOCL), intends to channel investments of 1 trillion rupees into petrochemical projects over a period of five to six years. The goal of these investments is to increase the intensity of petrochemicals—the share of crude oil converted into chemicals—from the current 6.5 percent to 16 percent.
Finance Director Anuj Jain stated during an investor call that the company will utilize its capital expenditures (capex), which typically range from 30,000 to 40,000 crore rupees annually. He specified that the estimated cost of these projects is around 1 lakh crore rupees over five to six years, and they are at various stages of approval.
As India increases refining capacity to meet domestic demand, the production of petrochemical products is expected to accelerate. Indian Oil aims to increase its petrochemical production capacity from the current 4.3 million tonnes per year to 13 million tonnes per year by 2030.
India, possessing the fourth-largest refining capacity globally, plans to increase this capacity from 260 million tonnes per year to over 300 million tonnes per year, striving to become a global refining hub. Indian state-owned refineries, including Indian Oil, Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL), are expanding the capacities of existing plants while simultaneously constructing new refineries with petrochemical complexes.
New Refineries
New refineries being built in India are placing greater emphasis on the production of petrochemical products. For instance, the upcoming BPCL refinery in Andhra Pradesh targets a Petrochemical Intensity Index (PII) of 35 percent, while the new HPCL refinery in Barmer, Rajasthan, has a PII of 26 percent. Additional capacity increases at other plants across the country are also aimed at stimulating petrochemical production.
Anuj Jain added that IOCL's current main focus is on petrochemicals due to high domestic demand. However, in the future, the company plans to invest in the renewable energy sector, aiming to achieve 18 gigawatts (GW) of renewable energy capacity within the next three to four years. He emphasized that renewable energy and petrochemicals will be two sectors constituting the bulk of capital expenditure. Furthermore, investments will be made in pipelines, biogas, sustainable aviation fuel (SAF), green hydrogen, and shipping.
Meanwhile, the joint venture between Indian Oil and Chennai Petroleum Corporation Ltd (CPCL) is working on reconfiguring the upcoming new refinery in Nagapattinam, Tamil Nadu, to ensure higher petrochemical output from this project.
