New Delhi: A unit of Indian Oil Corp. plans to invest $5.5 billion to gradually raise the capacity of its smallest refinery, which is co-owned by Iran, to 300,000 barrels per day (bpd), its chairman said, to help meet an increase in demand for refined products in the world’s fastest growing major economy.
The Nagapattinam plant operated by IOC’s subsidiary Chennai Petroleum Corp. requires a complete overhaul to produce the cleaner, higher grade fuels needed to meet rising demand in southern India, according to B. Ashok, chairman of the two companies.
India, seen as the most important driver of world energy demand growth in the years to come, is building new refineries and expanding a number of existing plants to meet demand.
According to a 2015 report by the International Energy Agency (IEA), India will require up to 329 million tonnes of oil products annually by 2030.
As of last year India consumed 183 million tonnes of refined products, government data showed.
The government is also planning a countrywide switch to the use of cleaner transport fuels compliant with Euro IV emission standards from April and with the Euro VI standards from April 2020.
CPCL’s two plants, in which Iran’s Naftiran Intertrade Co. Ltd has a 15.4% stake, are located in the southern state of Tamil Nadu.
Initially the oil processing capacity of the Nagapattinam plant will be raised to between 120,000 bpd and 180,000 bpd and in the next phase to 300,000 bpd, Ashok said.