Indian Oil Corporation (IOC) Raises Panipat Refinery Expansion Costs by 10%, Postpones Deadline by One Year

Indian Oil Corporation (IOC) has announced a revision in the estimated cost for expanding the Panipat refinery in Haryana, increasing it by 10% to ₹36,225 crore. The completion deadline for the project has also been pushed back by more than a year, now scheduled for December 2025. The refinery expansion aims to boost the facility's capacity from 15 million tonnes per year to 25 million tonnes.

According to a filing with the stock exchange, IOC's board has approved the cost revision and the adjusted completion schedule. The initial project cost was ₹32,946 crore, with a completion target set for September 2024. The expansion project involves not only increasing the crude oil processing capacity for fuel production but also includes the establishment of a polypropylene unit and a catalytic dewaxing unit.

Polypropylene, a versatile polymer, finds applications in packaging, automotive components, textiles, and various other industries. The catalytic dewaxing unit is crucial for base oil production. IOC, which owns and operates nine of India's nearly two dozen refineries, has a total refining capacity of 70.1 million tonnes per annum.

In its latest annual report, IOC stated, "By 2026, our approved projects will significantly increase our crude oil refining capacity from the current 70.05 million tonnes per annum to 87.9 million tonnes." The company has been actively investing in projects to enhance operational flexibility and meet the growing domestic demand for energy.

Recently, IOC awarded a contract to McDermott International Ltd for the further expansion of olefins and polymers production at the Panipat refining and chemical complex. This expansion is designed to improve the refinery's operational flexibility, increase petrochemical and specialty product production, and reduce the company's reliance on conventional fuel business.

Additionally, IOC's phase-two naphtha cracker unit (NCU) expansion project is expected to boost ethylene production capacity by around 20%. Apart from dominating 28% of the nation's oil refining capacity, IOC also owns a significant share of petrol pumps in the country, with 36,792 out of 88,248.

In a move towards sustainable energy solutions, IOC's board has approved the "procurement and installation of 4,000 fast electric vehicle chargers at an estimated capital investment of ₹919.78 crore." This investment reflects the company's commitment to alternative energy sources, aligning with the broader shift away from fossil fuels. The demand for chemicals and petrochemicals in India is anticipated to nearly triple by 2040, driving IOC's strategic investments in diverse and forward-looking projects.

HBL