OREANDA-NEWS. February 18, 2011. Indian Oil Corporation (IOC) is set to pump in Rs 4,000 crore to upgrade its refinery in Haldia.The board of the company is likely to give its final approval to a proposal to set up a delayed coker unit (DCU) aimed at making the 7.5-million-tonne refinery more profitable. The unit has enough land under possession to build the unit. It will take about three years to complete construction.

A DCU can improve the gross refining margins (GRM), the yardstick to calculate the profitability of a refinery, by converting low value residual products such as bitumen to lighter products of higher value (petrol, diesel or cooking gas).

“A study has already been conducted. We are seeing now how the economics of the investment work out. Hopefully, the final nod from the board will come in the next 2-3 months,” a senior IOC official said.

The fresh dose of investment comes close on the heels of the expansion of the refinery to 7.5 million tonnes from 6 million tonnes and the setting up of a hydrocracker unit for Rs 3,700 crore late last year. The yield of the unit is likely to go up 5-6 per cent when the DCU comes up.

IOC wants to expand the refining capacity to 9 million tonnes and build a petrochemical complex to produce paraxylene. But it requires additional land from the Calcutta Port Trust (CPT) to carry out the job. It has requested for 100 acres, which is be part of the closed Hindustan Fertiliser Corporation (HFC).

Budget wish list IOC hopes that the 5 per cent duty on imported crude will go in the forthcoming budget, providing relief to refining and marketing players such as IOC, Hindustan Petroleum and Bharat Petroleum. “Crude prices have gone up. If the duty is waived, it will help us to tackle under-recoveries from selling petroleum products,” S.V. Narasimhan, chairman of IOC, said in Calcutta today.

Speaking on the sidelines of the 16th Refinery Technology Meet organised by the Centre for High Technology and IOC, Narasimhan said IOC was losing Rs 9.55 a litre on diesel and Rs 1-2 a litre on petrol.