IndianOil complains new Gujarat law hurts Koyali

Vol 17, PW 26 (14 Aug 14) Midstream & Downstream

IndianOil's ambitious plans to expand capacity at its 13.7m t/y (274,000 b/d) Koyali refinery in Gujarat to 18m t/y continue to be plagued by land acquisition problems.

IOC needs up to 85 acres of land at Bajwa village near Koyali for the expansion but in June Gujarat officials said it needs to wait until new land acquisition laws are passed by the Gujarat Legislative Assembly. Worse, the new laws are likely to quadruple compensation claims by farmers, raising the estimated Rs8000cr ($1.29bn) expansion cost.

“We were expecting the (land acquisition) bill to be tabled in the (Gujarat assembly) budget session in July,” an IOC source tells us. “But this did not happen.

” IOC now expects the bill to be introduced in the winter session. Hyderabad-based Mescon Survey was appointed to identify land for the Koyali expansion and last year IOC hired Engineers India (EIL) to prepare a Feasibility Report (FR) for the expansion, submitted in April 2014.

“Engineers India is now working on the DFR (Detailed Feasibility Report) which must be submitted by February or March 2015,” we hear. Koyali's expansion will see IOC add a new hydrocracker unit to extract diesel, petrol, kerosene and jet fuel from crude oil; a hydrogen unit to extract hydrogen from crude oil; and a sulphur recovery unit.

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