Published: Friday, 12 February, 2016 12:10 PM
Paradip Refinery, A Booster For Indian Economy
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Read General Awareness Topic: Paradip Refinery, A Booster For Indian Economy
On February 7, 2016, the Indian Prime Minister inaugurated the Indian Oil Corporation’s (IOL) Paradip Oil Refinery in Paradip, Odisha. With the refining capacity of 15 million tonne per annum (mtpa), it is the most capital intensive project taken by IOC so far. It is 11th refinery of IOC and 23rd overall in India. It is most advanced of them all as well as the largest green field facility on the east coast.
It also has a 17 metre deep natural draft for its oil jetty that can berth very large ships and has captive multi fuel power plant that can generate 360 MW of electricity. The facility is equipped to refine any kind of crude oil imported from Gulf, Africa or South America. It can supply Euro-IV and Euro-V premium grade fuels, aviation turbine fuel, kerosene, LPG and is configured to process a mix of high sulphur and heavy or sour crude.
Any new development taking place in energy sector is always a welcome step because energy is the basic fuel required for travelling on the road to development. The Union Oil Minister Dharmendra Pradhan has revealed his plans to develop the northeast region of India by investing in hydro-carbon sector. The government expects the Paradip project to trigger a new wave of industrialization in hydrocarbon sector.
The current refining capacity in India is 215 mtpa in comparison to 165 mtpa of domestic consumption. Oil Ministry has long term plan to increase the refining capacity to 550 mtpa by 2040 and build a strong network of oil and natural gas pipelines. By the year 2030, government wants to have a strong base in the markets of Bangladesh, Nepal, Bhutan, Myanmar and Thailand.
The 2030 vision document involves expansion of fuel marketing infrastructure in the region along with opening up retailing facilities in neighbouring countries with local partners. The setting up of Paradip refinery must be seen as a part of this long term plan rather than populist measure to catch vote bank in Odisha.
Despite being a net importer of crude, India is net exporter of petroleum products. Though Indian petrochemical industry boasts of the turnover USD40 billion, it accounts for a small share in the USD600 billion global petrochemical markets dominated by China and the US.
The state of the art Paradip facility will definitely boost the exports of petrochemical products expanding the Indian share in the industry. Since Paradip is the major port on the Indian east coast, the newly set up refinery will also give a boost to the oil and petrochemical exports to the countries bordering Bay of Bengal like Bangladesh, Thailand, Myanmar, Indonesia, Malaysia, Sri Lanka as well as other countries in ASEAN.
Many may see the investment in petrochemical industry at this point of time when the oil prices are at the nadir a bad idea however, it must not be forgotten that oil industry is still the lifeline of global transportation industry be it a land, air or rail transport. Therefore, investment during the slowdown would definitely bring higher returns when the market rebounds and prices starts rising.
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