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Richa Mishra

New Delhi, March 18 Indian Oil Corporation Ltd plans to raise almost Rs 15,000 crore from the domestic and external markets to part finance its grassroot refinery complex at Paradip, Orissa.

The company’s board at a recent meeting has approved a final investment of Rs 29,777 crore for the project.

Speaking to Business Line, Mr B.N. Bankapur, Director (Refineries), IOC, said, “We have got our board’s nod for Rs 29,777 crore investments in the 15-million-tonne refinery project. The domestic funding of Rs 9,800 crore is being done by a SBI-led consortium of 20 banks and the Rs 4,000-5,000 crore will be raised through external markets.”

The external funding would be mainly used for buying equipment for the project, which would be sourced from the international market, he said.

Mr Bankapur, however, did not give any timeline for the company tapping the external market for the project, which is the single largest investment undertaken by Indian Oil Corporation at one location.

Agreeing that setting up of an integrated refinery-cum-petrochemical project was a better proposition, Mr Bankapur said IOC had to de-link the petrochemical project from the refinery project at Paradip due to cost escalation.

The total project cost (refinery-cum-petrochemical) is estimated to be Rs 54,000 crore.

“Besides, the magnitude of work for setting up integrated infrastructure is huge. Consultants were not available who could tackle such a huge project. In phase one, the company is implementing the refinery project and would implement the petrochemical project next,” he said.

Even the refinery project, which is under implementation, would be commissioned in phases. In the initial phase the primary unit of the refinery crude distillation unit and naphtha cracker, sulphur recovery unit and diesel hydro treater will be commissioned by March 2012.

The complete commissioning of the refinery is expected by June 2012.

More Stories on : Overseas Borrowings | Petroleum

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