IndianOil's$480m Panipat petchem expansion

Vol 27, PW 11 (30 May 24) Midstream, Downstream, Renewables

Their names might not slip easily off the tongue, but Maleic Anhydride (MAH), Butanediol (BDO) and Tetrahydrofuran (THF) are petrochemicals with a broad range of uses.

That explains why IndianOil plans to invest an estimated Rs4000cr ($480m) to set up India's first plant to produce this stuff at its Panipat refinery and petrochemical complex. MAH is used to make polyester and resins, as well as in pharmaceuticals and pesticides.

BDO is used as a solvent, liquid fuel, and precursor of many synthetic polymers and resins. THF is used as a solvent and in varnishes.

IndianOil has extended the bid deadline from May 16 (2024) to May 30 (2024) in the EPC tender to set up the facility after holding a pre-bid on April 10 (2024) at the Gurgaon office of its project consultant CB&I India, a McDermott subsidiary. Expect IndianOil to extend the deadline again beyond May 30 (2024).

An industry source says US-based Huntsman Corporation will provide technology for the 120,000 t/y MAH, and UK-based Johnson Matthey will provide technology for the BDO and THF units, each of 40,000 t/y capacity. L&T, Technip, Petrofac, Tecnimont, Toyo Engineering and Megha Engineering attended the pre-bid, after which IndianOil and McDermott sent out a 17-page response to technical queries and a nine-page response to commercial queries.

Likely bidders who complained about inadequate technical information received the reply that this would be provided separately or shared with the successful bidder. For other technical queries, likely bidders were asked to comply with the bid document.

IndianOil and McDermott said that "it may not be feasible to extend the (bid) due date by ten weeks," as some bidders requested because of the project's complexity. Others wanted an extension to at least the end of June 2024.

Industry sources expect bids from L&T, Petrofac and Technip. Tecnimont is unlikely to bid because it has competing technologies for MAH, BDO and TFH.

Toyo is unlikely to bid because its Japanese HQ is not keen, while Megha apparently doesn't meet the stringent technical qualification criteria. Whoever wins must complete work in 32 months plus two months for commissioning.

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Some wanted IndianOil to allow consortia or JVs of Indian companies to bid, as in several previous IndianOil refinery and petrochemical tenders. But IndianOil and McDermott refused. Only consortia or JVs with two members at most can bid. Further, a consortium or JV must be between a foreign company and an Indian company with similar work experience or a foreign company and its Indian subsidiary or affiliate, which meets the technical experience criteria. The bidder should have done “residual design, and detailed engineering and design” of similar facilities to those listed in the tender. They should have successfully commissioned these facilities and operated them for 12 months. IndianOil and McDermott also refused to allow a bidder to have an MoU with an engineering subcontractor or a specialised engineering company as a subcontractor instead of providing detailed engineering qualifications. Similarly refused was a request that the successful bidder be allowed up to 84 days from the ‘acceptance of bid’ notification to begin work instead of just 60 days.

IndianOil's$480m Panipat petchem expansion

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