The state-run company is boosting capacity at its Nagapattinam facility by nine-fold to process 9 million tons per year and the investment is Naftiran Intertrade Co.’s share of the 275 billion rupees ($4 billion) expansion plan, Managing Director S.N. Pandey said in an interview in Chennai last week. The rest of the investment will be through debt and equity, including fresh capital from its main founder Indian Oil Crop.
“We will achieve the financial closure in 2019,” Pandey said. “We don’t see any issue in debt raising. We have already talked to many bankers.”
Apart from boosting capacity, Chennai Petroleum is building a petrochemicals plant of about 475,000 tons per annum capacity, Pandey said. The new plants will enable the refiner to process dirtier and cheaper crude, apart from making more value added products. This year, it imported Iraq’s Basrah heavy crude for the first time and is now looking get shipments from the U.S., Pandey said.
The detailed feasibility report for the expansion projects, that includes the petrochemicals plant, is expected to be ready by June. “Tentatively by December 2022, the whole complex will be ready,” Pandey said.
Chennai Petroleum operates a bigger refinery at Manali near the city of Chennai, with capacity to process 10.5 million metric tons of crude annually, or about 210,000 barrels a day.