The country’s largest refiner, Indian Oil Corporation (IOC), is increasing its capacity by 25 million metric tonnes per annum [MMTPA] and is targeting to process high-value petrochemicals in a big way. IOC will increase its overall refining capacity from about 81 MMTPA to 106 million tonnes by 2023-24, chairman and managing director Shrikant Madhav Vaidya told Fortune India.

The refining capacity of its Koyali refinery in Gujarat will go up from 13.7 MMTPA to 18 MMTPA, while capacity at Panipat refinery in Haryana will increase to 25 MMTPA from the current 15 MMTPA. A new 9-MMTPA plant, built by its subsidiary Chennai Petroleum Corp Ltd (CPCL), is coming up at Nagapattinam, Tamil Nadu. At its five-year-old Paradip refinery — the most modern refinery in India built at an investment of over ₹34,555 crore — a new ₹5,654-crore Mono Ethylene Glycol (MEG) plant is coming up. It will make IOC a major producer of textile fibres. The plant will use propylene and ethylene from off gases to make MEG, a key ingredient for the fibre.

The company will also foray into textiles, with plants coming up at textile parks near Paradip and Panipat petrochem complexes. Each of these projects will cost ₹2,000 crore each. A similar ₹5,251-crore petrochem plant is coming up at Gujarat refinery, mainly to reduce India’s dependence on butyl acrylate, a key ingredient for polyester and plastics.

“Our plans are to have at least 15% of my crude converted into petrochemicals where margins are more,” says Vaidya. All newer refineries will help reduce emissions and carbon footprint, besides increasing refining capacity and margins.

The refinery expansions alone will cost over $13 billion or ₹1 lakh crore. The projects are slated for commissioning within the next two-three years.

Expansions are also happening at its Guwahati and Barauni refineries. Old plants are being refurbished for better efficiency and high-value petrochemical products. Polypropylene, Styrene Monomer projects at Panipat and the Lube Integration project at Gujarat refinery are examples of such high-value petrochem diversification plans. “All my new refineries are having higher complexities and can process heavier crudes to give me a better yield for our products,” says Vaidya.

Petrochemicals contribute only 3% of IOC’s revenues, but that business gives over 17% of its profits. The focus on petrochemical business will help de-risk business and bring more value to the company, adds Vaidya.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.