Paradip Refinery – A Booster for the Indian Economy

Paradip Refinery is located in the Jagatsinghpur district of Odisha in India, under the supervision of Indian Oil Corporation (IOCL). The Refinery is IOCL’s 11th and India’s 23rd refinery. Paradip Refinery is the most advanced of all refineries in the country as well as the largest green field facility on the east coast. It started operating in 2016. Visualised as the Energy Gateway to Eastern India, the 15 MMTPA grassroots refinery has been structured at an estimated expense of Rs. 35,000 crore.

The refinery is structured to process high-sulphur crude oils with major subsidiary processing units such as Naphtha Hydrotreating Unit (NHT), Continuous Catalytic Reformer (CCRU), Diesel Hydro-treatment Unit (DHDT), VGO Hydrotreating Unit (VGOHDT), INDMAX, Delayed Coking Unit (DCU), Alkylation unit, Merox, etc. Paradip Refinery is facilitated with a confined power plant to meet the demands of steam and power at the complex.

Paradip Refinery Project

The primary objective is to make it commercially feasible across its complete lifecycle. The larger the capital investment involved, the corresponding approach is to optimise and control the operation cost below the profit line so that its application won’t be considered a loss for the upcoming economic scenarios. This is what India’s refinery project owners and engineers forecast. The process and project engineers of the IOCL refinery wing have been exceptionally efficient in managing the 15 million metric tons per annum refinery with an estimated investment of Rs.35,000 crore.

For the refinery, IOCL has laid out an extensive evacuation plan for transporting the refined, finished petroleum products. It includes a large, new, cross-country product pipeline network, taken up by the pipeline division of Indian Oil.

 IOCL is setting up

• A 1065 km product pipeline along Ranchi-Paradip-Raipur to churn out 3.75 MMTPA of products from the refinery to parts of Jharkhand, Chhattisgarh, and Odisha. 
• Another 710 km LPG pipeline is being structured between Paradip and Haldia – to the LPG plants for bottling at Balasore in Odisha and Budge Budge, Kalyani, and Durgapur in West Bengal. The pipeline is currently undergoing expansion to reach Muzaffarpur and Patna.
• Two petroleum product pipeline projects: the 1,212 km-long Paradip to Hyderabad pipeline and the 344km-long Paradip-Somnathpur-Haldia pipeline are under construction and expected to be completed in 2022.

Paradip Refinery Products

The refinery can handle 100% high-sulphur crude oils and it produces a range of refinery products including:

• Petrol
• Diesel 
• Liquified petroleum gas (LPG) 
• Aviation turbine fuel
• Kerosene
• Sulphur 
• Petroleum Coke

The products from the Refinery meet the energy demands of the domestic market and are partly exported.

Paradip Refinery: Fueling the Economy

Paradip Refinery has a 17-metre deep natural draft for its oil jetty that can accommodate very large ships and can secure a multi-fuel power plant that can generate 360 MW of electricity. The facility is proposed to refine any kind of crude oil imported from the Gulf, Africa or South America. It can provide Euro-IV and Euro-V premium grade fuels. 

The Union Oil Minister, Dharmendra Pradhan, has revealed his plans to develop the northeast region of India by investing in the hydro-carbon sector soon. The government expects the Paradip project to develop in the hydrocarbon sector, triggering a new wave of industrialization.

Currently, the refining capacity in India is 215 MTPA – we have 165 MTPA of consumption domestically, the remaining 50 MTPA are considered for exports. The Oil Ministry has a long-term plan to expand the refining capacity to 550 MTPA by 2040 and build a strong network of oil and natural gas pipelines. By the year of 2030, the vision is to expand fuel marketing infrastructure in the regions concerned along with opening up retailing facilities in neighbouring countries.

Despite being a net importer of crude, India is a net exporter of petroleum products. The petrochemical industry of India enjoys a turnover of USD 40 billion.

The Paradip facility will surely fuel the exports of petrochemical products, expanding the Indian share in the global industry. Since Paradip is a major port on the Indian east coast, it will also boost oil and petrochemical exports to countries like Bangladesh, Thailand, Myanmar, Indonesia, Malaysia, Sri Lanka as well as other countries in ASEAN.  

Conclusion

The large-scale initiatives for structuring and operating the Paradip refinery will be exemplary. Most importantly, it allows for high self-sufficiency and independence with regard to production of value-added and exhaustive petroleum products thereby resulting in minimised dependency on costly imports and substantial savings in foreign exchange. These also include steep reduction in heavy transportation costs for boarding petroleum products to the Eastern region from other locations.

Hence, the Paradip refinery is said to be helping the Indian economy in myriad ways. Many may see investment in the petrochemical industry when oil prices are at the lowest point as a bad idea. However, it must not be forgotten that the oil industry is still the lifeline of the global transportation industry, be it land, air or rail transportation. Therefore, investment during the slowdown would definitely bring higher returns when the market rebounds and prices start rising.