Indian Oil Corporation to invest over Rs 21,000 crore in Bihar refinery expansion, city gas projects

Indian Oil Corporation (IOC) -- the nation's top oil firm -- will invest over Rs 21,000 crore to expand the Barauni refinery in Bihar as well as in setting up a city gas distribution network across the state, a senior executive said on Thursday.

IOC is expanding its Barauni refinery to 9 million tonnes per annum from current 6 million tonnes together with a petrochemical plant at a cost of about Rs 16,000 crore and invest another Rs 5,600 crore in setting up network to retail CNG to automobiles and piped cooking gas to households and industries in 27 cities of Bihar, company Executive Director Suman Kumar said while speaking at the Bihar Business Connect 2024 investor summit here.

"IOC is the oldest investor in Bihar, setting up the Barauni refinery in 1964. The initial capacity was 3 million tonnes per annum which was later expanded to 6 million tonnes. Now we are expanding the capacity from 6 million tonnes to 9 million tonnes per annum. Alongside, a 200,000 tonnes polypropylene is also being set up," he said.

Polypropylene will be the raw material for the plastic industry.

The expansion and PP plant is scheduled to be commissioned by 2025-end.Besides, IOC is also investing Rs 5,600 crore in setting up city gas distribution (CGD) network in 27 districts of Bihar, he said.

Previously, the company, along with partners, had spent Rs 9,512 crore in revival of the Barauni fertiliser plant, starting urea production in October 2022. The plant was part of a government initiative to revive closed urea units and increase the availability of domestically produced urea.

The investments are part of the IOC's aim to become a USD 1 trillion company by 2047, he said.

The USD 110 billion oil major has drawn up an aggressive capital expansion plan, proposing to invest more than Rs 2 lakh crore through the decade to expand refining capacity, petrochemical integration, allied infrastructure and renewable energy assets.

With India's economy on the rise, the energy needs of the country are growing exponentially. As 'The Energy of India', the firm aims to become the nation's lead energiser, fulfilling 12.5 per cent (1/8th) of India's energy needs by 2050, he said.

Besides Barauni, the state-run refiner is expanding the Panipat Refinery from 15 million tonnes to 25 million tonnes a year and the Gujarat refinery from 13.7 million tonnes to 18 million tonnes, along with its integration to lube and petrochemical production units.

While the first phase of petchem expansions at Panipat in Haryana and Paradip in Odisha is complete, the one at Gujarat refinery is scheduled for commissioning in 2024-25.

Alongside, it is pursuing green initiatives, including hydrogen mobility, hydrogen transportation, biofuels, electric mobility, solar cooktops, and minimising water footprint.

Oil demand in India, the world's third-largest energy consumer, is projected to rise from 5.4 million barrels per day (bpd) in 2023 to 9.3 million bpd by 2040. Fulfilling this rising demand will require augmenting the country's refining capacity progressively, from the current 256.8 million tonnes per annum to 450 million tonnes.

In addition, the country is set to add 50 GW of renewable energy capacity annually, aiming to achieve 500 gigawatts (GW) of installed renewable capacity by 2030.