Ahmedabad: Russian energy giant Rosneft backed Nayara Energy, earlier known as Essar Oil, has chalked out massive expansion plans for India which include setting up of a greenfield petrochemical complex and ramping up its existing refining capacity from 20 million tonnes per annum (mtpa) to 46 mtpa at Vadinar near Jamnagar in Gujarat, according to two industry officials close to the development.
The total envisaged investment for expansion, of which a major part is towards building a new petrochemical complex, is about Rs.1.5 lakh crore, they said. The expansion plans also include increasing its retail presence and additional investment at the captive port of Vadinar.
When contacted principal secretary to Gujarat chief minister, M K Das, confirmed the development.
“Senior executives of Nayara Energy recently met chief minister Vijay Rupani in Gandhinagar where they expressed their gratitude to the state government for their continuous support to industries. The company representatives indicated in the meeting that they are willing to make commit additional investments in the state to the tune of Rs.1.5 lakh crore,” Das said.
The company has recently received necessary environmental clearances for the expansion project and it aims to carry out the proposed expansion on the existing land spread over 2,275 hectares and does not require any additional land.
Nayara’s proposed refinery expansion will be focused on production of fuel products as well as petrochemical feedstock. The strong demand growth outlook will require capacity addition of nearly 224 MTPA refining capacity in India and this is likely to create considerable need of polypropylene, ethylene and other petrochemical capacity in India by 2025, Nayara has said in a presentation to the government.
A senior official at Nayara Energy when contacted refused to comment on the development.
In August 2017, Petrol Complex Pte Ltd, a subsidiary of PJSC Rosneft Oil Company acquired 49.13% and Kesani Enterprises Company Ltd, a consortium led by Trafigura Group Pte Ltd and Russian private equity fund United Capital Partners, acquired another 49.13% from the Essar Group in what was then known as Essar Oil.
The proposed expansion shall take place in phases and is expected to be completed by 2024. The company has also made a proposal to Deendayal Port Trust, the maritime regulator for Vadinar port, for setting up a single-point mooring (SPM) and two product jetties for an investment of about Rs 450 crore, said a senior official at Deendayal Port Trust who did not wish to be named.
India has emerged as major refiner, having the fourth largest refining capacity in the world following the US, China and Russia. With 23 refineries with combined capacity of 247.6 MMTPA, India not only serves its domestic demand for 195.7 MTPA (2017-18) of petroleum products but also supplies petroleum products to other Asian countries, according to a pre-feasibility report submitted by Nayara Energy for environmental clearance in May 2018 to the Ministry of Environment, Forest and Climate Change. Mint has reviewed a copy of the proposal.
India’s exported 66 MMTPA (2016-17) of petroleum products which was almost its entire refining capacity in 1998-1999, it said.
The petrochemical complex includes setting up an ethylene cracker and associated units, aromatics, polyester intermediates, polymer units, phenol chain and speciality chemicals.