Indian Oil plans $500MM expansion of Panipat naphtha cracker by 2019

Indian Oil is planning to expand capacity at its naphtha cracker in Panipat by 2019, the executive director of the refiner's petrochemical division told news agency Reuters.

The expansion would increase capacity of the cracker in northern India from about 850,000 tpy to 1.2 MMtpy by 2019, the report says. It would cost about half-a-billion dollars, S Mitra said at a condensate and naphtha forum in Singapore.

"Demand in [India] for polymers is growing," said Mitra, adding that baout 90% of the polymers that Indian Oil produces is for domestic use.

However, it is unlikely that Indian Oil would build a brand-new naphtha cracker in India in the short-term because of challenges related to obtaining naphtha from one single refinery.

The Panipat cracker currently needs over 2 MMtpy of naphtha feedstock. It takes that feedstock from several nearby refineries, including Indian Oil's Mathura and Haldia plants. This will continue even after the Panipat cracker's expansion, Mitra said.

Indian Oil, India's top refiner by capacity, exports an average of 800,000 tpy of naphtha through various ports including Dahej, Haldia and Chennai.