Chennai Petroleum to set up $3.9 bn refinery in Cauvery basin

The Chennai Petroleum Corporation has formed a joint venture with its parent company Indian Oil Corporation and a few others to build a 9 million metric tonne per annum (MMTPA) refinery at a cost of $3.95 billion (₹31,514.77 crore) in southern Tamil Nadu.

“The new refinery will be set up in Nagapattinam, where at present a small refinery in the Cauvery basin is being operated. The present refinery has a capacity of 1 MMTPA but this will be dismantled and a new refinery will come up at the same place,” said a Chennai Petroleum Corporation Limited (CPCI) official.

A detailed feasibility report (DFR) for the new refinery project has been completed. The refinery will produce LPG, BS VI quality gasoline and diesel and Aviation Turbine Fuel (ATF). The project also includes a polypropylene unit as part of petrochemical integration, with potential to further increase the production of petrochemicals in the future.

A desalination plant is being envisaged for crude import and refinery water requirement respectively. The project adopts the latest indigenous technologies for main process units like crude distillation unit, INDMAX Unit and Octamax Unit.

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The company has signed a MoU with the Tamil Nadu government to avail a structured package of incentives for the project.

IOCL board has accorded approval for implementation of the project at CBR Nagapattinam through a joint venture, with IOCL and CPCL together holding 50 per cent stake and the balance 50 per cent is to be held by financial/strategic/public investors.

Environmental clearance for the project has been granted. Consent to establish has also been received from the Tamil Nadu Pollution Controlling Board (TNPCB).

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The refinery complex will cater to the demands of the southern region and provide impetus for economic development of the region. The project will be an opportunity for highly industrious and skilled people to provide services for about 130 million man hours during the execution phase.

The project will result in substantial socio economic benefit to the country in general, and more specifically to the state, said the official.