Indian Oil Corporation (IOC), the nation’s largest oil firm, will invest over ₹61,000 crore in setting up a mega petrochemical complex at Paradip in Odisha to meet the rising demand for petrochemicals in the world’s fastest-growing economy, its chairman AS Sahney said.
IOC has signed a memorandum of understanding with the Odisha government at the State’s investor meet, committing to invest ₹61,077 crore in the complex.
Besides IOC, Petronet LNG Ltd, India’s biggest liquefied natural gas importer, signed a pact to invest ₹6,500 crore to set up a LNG import terminal at Gopalpur port in the State.
Indian Strategic Petroleum Reserves Ltd, the special purpose vehicle created by the government for setting up strategic oil reserves, signed for setting up a 4 million tonnes underground storage facility at Chandikhol in Odisha at a cost of ₹8,743 crore.
IOC’s ₹61,077 crore will be the company’s largest-ever investment at a single location. The firm already operates a 15 million tonnes a year capacity oil refinery in Paradip.
Sahney said the naphtha cracker, which will make raw material used to make plastics, technical textiles and other such chemicals, will be commissioned by 2029.
India’s petrochemical demand is likely to rise from 30-35 million tonnes currently to 80 million tonnes by 2040, he said, adding that the country needs a new cracker every two years.
The upcoming complex will house a dual-feed cracker and associated downstream units for the production of a wide range of petrochemicals including phenol, polypropylene (PP), isopropyl alcohol (IPA), high-density polyethylene (HDPE), linear low-density polyethylene (LLDPE) and polyvinyl chloride (PVC).
These products will serve as raw materials for speciality chemical sectors like pharmaceuticals, agrochemicals, coatings and adhesives, significantly reducing import dependency.
Speaking on the occasion, Oil Minister Hardeep Singh Puri said the market size of the Indian chemicals and petrochemicals sector is currently ₹18 lakh crore ($220 billion) and is expected to reach Rs 85 lakh crore (1 USD trillion) by the year 2040.
“However, the per capita consumption of various chemical products is significantly lower compared to developed economies and this gap offers substantial space for demand growth and investment opportunities,” he said.
Recognising the importance of the chemical and petrochemical sector, the government has initiated several key initiatives to accelerate the growth of the industry.
“Chemicals and petrochemicals sector has the potential to transform India into a global manufacturing hub. Odisha’s strategic location further strengthens its potential as a gateway for exports to Southeast Asia and beyond,” he said.
IOC, he said, has so far invested nearly ₹55,000 crore in the Paradip oil refinery and adjacent chemical factory. The refinery will provide feedstock for the petrochemical complex.
“The Paradip petrochemical complex will be a game-changer, catalysing industrial growth and self-sufficiency in the entire eastern region,” he said.
“The Paradip Petrochemical Project will significantly substitute imports in the chemicals and petrochemicals sector. This project will save over Rs 30,000 crore annually in foreign exchange, bolstering our economic resilience.” Petronet signed an MoU to set up its maiden LNG terminal on the east coast of India.
Its CEO AK Singh said the company has decided to set up a land-based 5 million tonnes a year import terminal at Gopalpur.
Previously, Petronet was looking to set up a floating storage and regasification unit (FSRU) based LNG terminal with a capacity of 4 million tons per annum (mmtpa) in Phase 1, with provision for converting to 5 million tonnes per annum land-based terminal at Gopalpur Port in Odisha.
“We have now got land so we have decided to convert it into a land-based terminal,” he said.
Petronet already has two LNG import facilities at Dahej in Gujarat and Kochi in Kerala.
Dahej LNG terminal currently has a capacity of 17.5 million tonnes and is under expansion to 22.5 million tonnes. The Kochi LNG terminal has a nameplate capacity of 5 million tonnes.
Adani Total Private Limited (ATPL), a 50:50 joint venture between Adani Group and TotalEnergies of France, commissioned the Dhamra LNG terminal in Odisha in 2023. Dhamra was India’s seventh LNG import and regasification terminal and the first on the eastern seaboard.
Published – April 09, 2025 02:17 am IST