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IndianOil starts $3.2 bln cracker to meet plastic demand

April 02/2010

April 2 (businessweek) -- Indian Oil Corp., the nations second-biggest refiner, started a $3.2 billion naphtha cracker in northern India to meet demand from plastic makers. Our main unit at Panipat was commissioned last month. - Serangulam V. Narasimhan, director of finance, said by telephone today, - Commissioning of the other smaller units should be completed by April.


Indian Oil may cut exports of naphtha as the refiner uses the oil-product as feedstock at the plant to produce ethylene and propylene. Demand for petrochemicals, used to make cars and home appliances, is increasing as economies emerge from the worst financial crisis in 70 years. Indian Oil will use more than 2 million metric tons of naphtha when the cracker operates at its full capacity, Narasimhan said. The plant will have a capacity to produce 857,000 tons of ethylene a year and 650,000 tons of propylene, according to the Web site.


Indias naphtha exports rose 26 percent to 8.7 million tons in the 11 months to Feb. 28, compared with the year-earlier period, according to provisional data on the Web site of the Petroleum Planning and Analysis Cell, a department of the oil ministry. The nations naphtha exports had risen after Indian Oil increased overseas shipments because of falling domestic sales. Local demand dropped after Reliance Industries Ltd. started supplying natural gas, an alternative fuel to naphtha, from its biggest field in April.


Rival Reliance produced 1.4 million tons of ethylene and 552,000 tons of propylene from its cracker plants in western India in the three months ended Dec. 31, according to a statement on the companys Web site. Indian Oil will use naphtha produced at its Panipat, Mathura and Gujarat refineries at the cracker. Indian Oil and unit Chennai Petroleum Corp. operates 60.2 million tons of refining capacity and plans to increase it to 80 million tons a year by 2012, Narasimhan said Jan. 6.

Indian Oil starts $3.2 bln cracker to meet plastic demand











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