Russian oil giant Rosneft-led Nayara Energy on Friday unveiled a USD 850 million expansion plan for its Vadinar refinery in Gujarat, marking its foray into the petrochemical business.
Nayara Energy, erstwhile known as Essar Oil, operates a 20 million tonnes a year oil refinery at Vadinar.
In the first phase, the company plans to set up a 450,000 tonnes per annum polypropylene plant, its CEO B Anand said after the firm signed an MoU committing the investment.
Polypropylene is used in a variety of applications, including packaging for consumer products, plastic parts for various industries including the automotive industry, special devices like living hinges, and textiles.
The planned investment is for a 450,000 tonnes a year Propylene Recovery Unit (PRU), a similar capacity Polypropylene plant and a 200,000 tonnes MTBE (methyl tertiary-butyl ether) plant.
"The planned investment is basically diversification into petrochemical business," he said, adding the unit is targeted to be completed by 2022-end.
Nayara Energy signed two memorandums of understanding (MoUs) with the Government of Gujarat at the summit.
Under the terms of the MoUs, Nayara Energy has committed to invest USD 850 million (around Rs 6,000 crore) towards phase-1 of the expansion plan which will see the establishment of new refinery and petrochemical units.
This investment will contribute significantly towards the development of Devbhumi Dwarka district as a petrochemical hub in India.
Anand said besides the petrochemical unit, investments would also go into adding capacity at the refinery to produce Euro-VI grade petrol and diesel.
As part of the pacts signed, Nayara Energy will initiate smart agriculture and water conservation programme in 11,000 hectares in Dwarka.
"With our investments and the retail expansion that is underway, we plan to optimize India's energy basket and offer energy to everyone," Anand said.
Rosneft in August 2017 bought Essar Oil for USD 12.9 billion and later renamed the company as Nayara Energy.
Speaking at the 9th Vibrant Gujarat Summit, Rosneft Global Head of Downstream Didier Casimiro said the company was gearing up to meet India's rising demand for oil while at the same time preparing to meet fuel requirements for the stricter BS-VI emission norm.
"I am glad to announce today that Nayara Energy will enter into a MoU worth USD 850 million with the Gujarat government for our expansion plan which will see us start a new refinery unit," he said.
Through Nayara Energy, Rosneft and its partner are committed to providing for India's energy security, Casimiro said.
"I would like to reassure everybody here and the Indian government that we are poised to supply India's rising demand while meeting the superior fuel to meet stricter emission standards," he added.
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