IOC board clears Rs 31,500-crore Nagapattinam refinery project; expects fuel demand to be normal soon
The new refinery will be a joint venture between Chennai Petroleum Corporation Ltd and IOC.
January 29, 2021 / 02:16 PM IST
Bharat Petroleum Corporation | In the last 5 trading sessions the share price was down 10.03 percent from Rs 346.80 to Rs 312 (May 5 to May 12). Market capitalisation stands at Rs 11,593.99 crore.
The board of Indian Oil Corporation (IOC) on January 29 cleared a proposal to set up a 9 million tonne (MT) refinery at Nagapattinam in Tamil Nadu that may see an investment of about Rs 31,500 crore.
This comes at a time when the company expects fuel demand to pick up during the fourth quarter of the current financial year. Already, petrol demand is around 105 percent of what it was last year and the company expects diesel demand to be more than 100 percent in the fourth quarter, said SM Vaidya, chairman of IOC.
The new refinery will be a joint venture between Chennai Petroleum Corporation Ltd (CPCL) and IOC. Both IOC and CPCL will together hold 50 percent stake (about 25 percent stake each) in the joint venture and the balance 50 per cent will be held by a strategic or financial partner. CPCL is a group company of IOC, in which National Iranian Oil Company (NIOC) holds a minority stake.
"We expect the project getting commissioned within 48 months once we have the statutory clearances," Vaidya said. Last year, CPCL board too had cleared the proposal and it got the nod from the Union Environment Ministry's Expert Appraisal Committee in September 2020.
The company said that already 650 acres of land necessary for the project is available with the company and the remaining 615 acres are on the advance stage of acquisition. The project is expected to create jobs for 25,000 people and around 80 percent of construction materials will be sourced indigenously.