CHENNAI: The 9-million-tonne-per-annum refinery project, a joint venture by the Chennai Petroleum Corporation Ltd (CPCL) and the Indian Oil Corporation (IOC), in Nagapattinam district would focus more on the petrochemical business to align with the future trends in fuel demand patterns as it shifts to green energy.
The Rs 31,850-crore refinery complex would produce liquified petroleum gas (LPG), aviation turbine fuel (ATF), petrol and diesel, along with petrochemical value-added products such as polypropylene. This will take care of the fuel demands of southern states, especially Tamil Nadu.
The IOC and CPCL each hold 25% of the stake in the project and the other 50% stake will be held by strategic investors. The project is currently in the initial stages of implementation and the civil works are expected to start within two months. It is expected to be completed by June 2025.
The disruptions in the fuel sector will give an opportunity in the petrochemical sector, said director (technical) of CPCL H Shankar. Speaking to TNIE, he said, “As of now the fuel demand has to be fulfilled. Over the period, if the demand for crude oil-based fuels comes down, the demand for oil to chemicals is expected to increase and we have to increase the output of petrochemicals”.
Traditionally, refineries are designed to extract 45% (appx) diesel and 10%-15% petrol (appx). Around 2025, assessing the fuel demands, a second phase of the project would be implemented, focusing more on the petrochemical business, which is capital-intensive and has a high return. “The polypropylene unit will serve as the mother unit for various ancillary units expected to come in Nagapattinam and surrounding areas. Various local players would set up companies in the vicinity for assured raw materials.”.
Once completed, the refinery has the potential to provide 5,000 jobs with 600 direct employees in the plant and around 3,000 contract workers. This will give a big push to Nagapattinam’s economy in the next 10- 20 years, H Shankar said. The new project will also expand into green hydrogen and bio fuels in the renewable energy sector.