IOC Awards Industrial Gas Supply Contract for Paradip Refinery to Praxair

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Researched by Industrial Info Resources (Sugar Land, Texas)--Indian Oil Corporation Limited (BSE:530965) (IOC) (Mumbai) has awarded a long-term contract to Praxair Incorporated (NYSE:PX) (Danbury, Connecticut) for the supply of nitrogen and hydrogen gases to its new $6.5 billion Paradip refinery, under construction in the state of Orissa in eastern India. The proposed refinery complex will have a processing capacity of 300,000 barrels per day (BBL/d) and will house a delayed coker unit, a hydrocracking unit and auxiliary processing facilities, in addition to a crude and vacuum distillation unit.

The facility also will house the hydrogen and nitrogen plants built by Praxair. The nitrogen plant will be set up with a production capacity of 500 tons per day, and the hydrogen plant will have a daily output of 90 million standard cubic feet.

The refinery is slated to commence operations anytime between March and November 2012, by which time the gas plants are expected to be functional.

The Paradip refinery has been designed to primarily process sulfur-rich, low-cost, heavy crude oil, with output targeted toward the domestic and Southeast Asian markets. Hydrogen from the Praxair plant will be employed to process several crude oil slates with varying percentage compositions. It also will be used to desulfurize the crude to yield fuel variants ranging from clean fuels to those with low sulfur content, effectively enabling the products to comply with environmental regulations. The plant's design also focuses on a zero-residue production process.

Civil construction activities at the Paradip refinery are likely to start by December 2009, with material requisitions, ordering of long lead time components, and detailed engineering for the project under way. Water source allocation for the venture from River Jobra in Cuttack, associated land permits, and the proposal for forest diversion are in their final stages of clearance. Infrastructure build up at the Paradip port is also under way, with the construction of a new roll-on, roll-off jetty, and a 7-kilometer coastal road link being initiated. In addition, basic designs are in place to build a new oil jetty at the port, to facilitate future oil imports. The facility will be constructed subject to government approval.

With the project-specific activities progressing as per schedule, IOC's Paradip refinery is likely to be commissioned by March 2012, augmenting IOC's total production from the present figure of 1.2 million barrels per day to 1.62 million barrels per day by 2012.

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