The country's top refiner will shut the naphtha cracker at its Panipat plant from Monday for a revamp aimed at raising its ethylene production capacity, the sources familiar with the plan said.
Panipat refinery currently has a capacity to turn 15 million tonnes per annum of crude oil into value-added fuels such as petrol, diesel, and ATF.
Also, an ethanol plant would be set up at a cost of Rs 500 crore by the Indian Oil Corporation in Panipat to generate alternative fuel from agricultural residue which would boost agriculture sector, the Petroleum Minister said.
IOC had previously planned to raise capacity of Panipat refinery from 15 mt to 20.2 mt, but now it is looking at raising the capacity straightway to 25 mt, its Director (Refineries) Sanjiv Singh said here.
India has surplus refining capacity, but there has been maintenance at some plants and petrol demand has risen after a cut in diesel subsidies increased the attractiveness of petrol cars.
The official said IOC is also looking at raising capacity of its 13.7 MT a year Koyali refinery in Gujarat by 4.3 MT as well as hiking capacity of Mathura refinery in Uttar Pradesh by three MT to 11 MT.
According to sources, IOCL is planning to establish an ethylene oxide purification unit in its Panipat refinery, a Rs 5000 crore greenfield project for acrylic and acetic acid production in Gujarat, and a polymer polypropylene unit in Paradip, making the total cost of these projects more than Rs 30,000 crore.