IOC says no to ex-Mobil refinery from Germany

Vol 6, PW 7 (05 Jun 02) Midstream & Downstream
     

INDIAN OIL HAS decided not to invest in a proposed 6m t/y refinery at Cuddalore in Tamil Nadu promoted by the Nagarjuna Group, arguing it doesn't need another refinery in southern India.

Last month IOC directors decided the project to import a disused refinery from Germany to Cuddalore is a non-starter. This is the third (and hopefully last!) time the Nagarjuna Group has tried to persuade IOC to invest in its project.

Two earlier attempts in June and July last year resulted in nothing except an IOC commitment to undertake a "total factual analysis and review". Nagarjuna misinterpreted this as renewed interest and submitted improved proposals in August and October last year.

But IOC and its masters at Shastri Bhawan were unimpressed, not least because of the changing refinery scenario in southern India, and projections (see below) that southern India will soon be flooded with oil products. "The situation changed after Chennai Petroleum became an IOC subsidiary," we learn.

"Capacity at Chennai is now being raised from 6m t/y to 9m t/y." Scenario 2004-05 2006-07 (Supplies of 144m tonnes products) 2006-07 (Supplies of 183m tonnes products) All India industry (surplus) 13m tonnes 9.4m tonnes 41.9m tonnes South India industry (surplus) 5.8m tonnes 3.1m tonnes 7.5m tonnes Chennai region industry (deficit) -1m tonnes -1.9m tonnes -1.9m tonnes IOC south India (deficit) -4.7m tonnes -5.9m tonnes -5.9m tonnes IOC Chennai region (surplus) 3.7m tonnes 3.3m tonnes 3.3m tonnes