Indian Oil Further Pushes Back Commissioning of Paradip Refinery

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Researched by Industrial Info Resources India (Delhi, India)--Indian Oil Corporation Limited (IOCL) (BSE:530965) (New Delhi) has again pushed back commissioning of its 3,00,000-Barrels Per Day (BBL/d) Paradip refinery by another six months. The refinery is now expected to start commercial production from March 2014, against the original schedule of November 2012.

The project has achieved overall progress of 92.7% against the revised scheduled progress of 94.1% until end of June 2013. The progress in building a raw water pipeline to the refinery from the Mahanadi River is faltering as also the installation of a captive power plant.

IOCL seems to be facing a plethora of problems while implementing the Paradip Refinery Project, as major vendors have failed to deliver critical items on time. The reasons being; the deteriorating law and order situation and frequent demonstrations by the locals at the Paradip site. This situation has resulted in en-mass desertion of labor from the site and has created acute shortage of skilled manpower. Most of the contractors are under financial strain and therefore unable to mobilize additional manpower resulting in missing committed targets.

While project completion is a challenge, so is the product evacuation. The main Paradip-Raipur-Ranchi Pipeline (PRRPL) is progressing at a slow pace and there is concern that the Production from the Refinery may have to be scaled down in case evacuation facilities are not entirely in place before the start up of the Refinery.

The refinery will have, apart from Crude and Vacuum Distillation Unit, a Hydrocracker unit, a Delayed Coker Unit, Fluid catalytic cracker, few distillates Hydrotreater and other secondary processing facilities. This will be the most modern refinery in India with 'zero-residue' production, with the products meeting stringent specifications.

Indian Oil Corporation is the largest refining company in India, owning 10 out of India's 23 operational refineries. The group refining capacity is 1.30 million barrels per day (approx), the largest share among refining companies in India. It accounts for 34.8% share of national refining capacity.

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