The Hindu Business Line : IOC plans to alter refining process, product profile

The aim is to take advantage of emerging technologies, which can use more of cheaper and easily available heavy and sour (high sulphur content) crude in place of the costlier light and sweet variety, so as to ensure a comfortable high refining margin (GRM) in the years to come.

Heavy and sour varieties are currently cheaper by $3 to $6 a barrel.

The project is clubbed with the company's investment plans to be a $60- billion company by 2011-12, by expanding refining capacity, diversification in petrochemicals, gas and upstream oil and gas exploration and production business.

IOC sources said that following completion of the company's technology upgradation and capacity expansion drive at existing refineries of Koyali, Panipat and Haldia and proposed refinery at Paradip, Indian Oil would be meeting 75 per cent of its crude requirement through the heavy and sour variety.

IOC group currently consumes 54 million tonne of crude oil. Of this IOC alone consumes 41 million tonne through its seven refineries. Approximately 55 per cent of total requirement is met through imports. The usage of heavy variety stands close to 50 per cent.

The sources said that following the ongoing upgradation, the company's largest refinery at Koyali (13.7 million tonne) will be using 75 per cent of heavy and sour variety as against a mere 28 per cent now. The project will be completed in 2006. The company is considering expansion of capacity to 18 million tonne.

Panipat refinery, which is being expanded from six to 12 million tonne at a cost of Rs 4,165 crore, will be using close to over 60 per cent of cheaper crude after expansion. Following expansion of capacity further to 15 million tonne, Panipat will end up using 75 per cent sour crude by 2009. The usage ratio will be higher at Haldia and Paradip.

IOC has lined up Rs 1,600 crore investment in Haldia for expanding capacity from 6 to 7.5 million tonne. After completion of the project in 2009, Haldia will be using 90 per cent of cheaper crude.

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