Kerala may get a petrochemical zone

Last Updated: Tue, Oct 23, 2012 21:11 hrs

With West Bengal shelving its commitment to building a petrochemical zone at Haldia, the Department of Chemicals and Petrochemicals has found a new project partner in Kerala.

The Kerala government has submitted a formal proposal to the Ministry of Chemicals & Fertilizers to set up a petrochemical zone or a Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) in Kochi. The proposed PCPIR will have Bharat Petroleum Corporation Ltd (BPCL) as the anchor tenant or the main refiner, from which the feedstock for other products will be manufactured. The PCPIR will be in close proximity to BPCL’s refinery at Kochi, which is expanding its refining capacity from 9.5 million tonnes per annum (mtpa) to 15.5 mtpa.

According to official sources, project will cost about Rs 9,000 crore, which includes cost of land, internal and external infrastructure, road and rail linkages, and setting up water supply systems. With the increased crude capacity of 15.5 mtpa, the refinery will produce 5,00,000 tonnes of propylene a year, in addition to various fuels, such as liquefied petroleum gas (LPG), high speed diesel (HSD), kerosene, aviation turbine fuel (ATF), petroleum coke, bitumen, etc. Sources said that by utilising the propylene, BPCL plans to establish joint venture companies for production of various base materials.

The Ministry of Chemicals & Fertilizers has asked all states to give feedback on refurbishing the PCPIR.

Gujarat has merged the PCPIRs with the special economic zones (SEZ) and received investments from private refineries and ship building companies.

Orissa and Andhra Pradesh governments have expedited the infrastructure and environmental clearances; however, refineries or anchor tenants are yet to sign up commitments. Indian Oil Corporation (IOC) is the anchor tenant for the Paradip PCPIR in Orissa, while Hindustan Petroleum Corporation Ltd (HPCL) and Oil and Natural Gas Corporation (ONGC) are the tenants in Andhra Pradesh.

Andhra Pradesh has also merged its textile and pharmaceuticals SEZs into the PCPIR zone for optimum utilisation of the infrastructure already developed, said sources.

The Tamil Nadu PCPIR, on the other hand, has got a commitment from private partner Nagarjuna Fertilizers and Chemicals for a six-million tonne per year capacity petroleum refinery project.

The company has already formed a joint venture company, Nagarjuna Oil Corporation, in partnership with the Tamil Nadu Industrial Development Corporation (Tidco) for the project, which will have captive marine facility (Thiruchopuram Port), tank terminals and a captive power plant. The total investment for the project is estimated at Rs 11,000 crore, and it is slated to be commissioned in the first quarter of 2014.

The project is designated as the anchor unit of the PCPIR to be established in Cuddalore and Nagapattinam districts.

However, Tamil Nadu is yet to sign the Memorandum of Understanding with the central government, said state government sources.

More from Sify: