Indian Economy News

Indian Oil Corporation (IOC) intends to spend more than Rs. 2,600 crore (US$ 312.5 million) to build greenfield units in the northeast

  • IBEF
  • October 4, 2023

Indian Oil Corporation (IOC) has announced robust strategies to invest more than Rs. 2,600 crore (US$ 312.5 million) over the next five years in the construction of multiple greenfield projects and the expansion of its facilities throughout the northeast.

IOC's board has already given the go-ahead to several new projects, while others are in the process of doing so. The top energy company is currently negotiating with the local governments in Meghalaya, Mizoram, and Manipur to finalise the land parcels for the greenfield units.

According to Mr. Ganesan Ramesh, Executive Director of IOC, the Northeast is one of the most crucial regions for Indian Oil, and the top management places a lot of emphasis here. By expanding refining and Petroleum, Oil, and Lubricant (POL) storage capabilities, the company intends to expand its business. He also mentioned that a major project is coming up in the POL segment: a greenfield depot at Sekerkote in Tripura, with an investment of Rs. 656 crore (US$ 78.8 million). There is one more project that has been accepted by the board: the expansion of the Betkuchi POL depot in Guwahati at a cost of Rs. 277 crore (US$ 33.3 million).

IOC intends to build new fire water tanks, raise the storage input from the current 25,000 kilolitres to 54,000 kilolitres, and add other facilities. In order to expand the Betkuchi plant, it has already purchased an extra 10.67 acres of land. IOC intends to increase the capacity of its refineries at Guwahati and Digboi with project costs of Rs. 412 crore (US$ 49.5 million) and Rs. 768 crore (US$ 92.3 million), respectively. The Northeast Hydrocarbon Vision 2030 includes plans for Bongaigaon refinery expansion, and the land-acquisition process is now ongoing. The company has decided to revamp the Dimapur depot in Nagaland, and board approval is in the process for an estimated expenditure of Rs. 231 crore (US$ 27.8 million).

Mr. Ganesan Ramesh further stated that land is being finalised for the setting up of greenfield POL depots at Umran in Meghalaya and Sihhmui in Mizoram to provide fuel security for these states. The organisation is discussing with the Manipur government the facility of a wagon receipt facility at the Imphal depot.

The PSU major has a few initiatives planned to increase the LPG bottling infrastructure throughout all of the northeastern states. A new LPG bottling facility with a capacity of 30 Thousand Metric Tonnes Per Annum (TMTPA) is being built at Umiam, Meghalaya, at a cost of Rs. 75.54 crore (US$ 9.1 million) that has been sanctioned. Another proposal calls for a brand-new, 30 TMTPA bottling facility to be built in Mualkhang, Mizoram, at an estimated cost of Rs. 193 crore (US$ 23.2 million), says Mr. Ganesan Ramesh.

IOC has 10 LPG plants in the northeast with a combined 692 TMTPA capacity for bottling. Out of the 1.12 crore LPG clients in the region, it has 871 distributors and 91 lakh active customers, making up 81.2% of all connections. Mr. Ramesh Ganesan, IOC, holds the greatest market share in the POL segment in the northeast, at 64.4% for petrol and 64.5% for diesel. With around 1,427 retail locations and 467 Superior Kerosene Oil (SKO) dealerships, which are supported by 10 bulk storage depots or terminals, it has a strong marketing infrastructure.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.