Indian Oil Corporation’s Paradip refinery, its 11{+t}{+h}, is a test lab for two important experiments.

First, a proprietary technology developed by the company to maximise output of liquefied petroleum gas (LPG) is being deployed on a commercial scale for the first time.

Second, non-core refinery functions are being outsourced to contractors in a bid to keep the employee structure lean.

Success in the two experiments will not only help the bottomline of the company but also make it the first oil PSU to become a technology licensor. Indian Oil piloted its proprietary INDMAX (Indane maximisation)-based fluidised catalytic cracking unit (FCCU) plant at the Guwahati refinery a few years ago on a small scale to test the technology. Having validated it, the company has now built a 4.1-million-tonne unit at Paradip that will help boost output of LPG to 44 per cent of the input crude oil. Conventional FCCUs produce about 18-20 per cent LPG. The FCCU cracks crude oil in the presence of catalysts into products such as LPG, petrol and propylene. India is short of LPG, with approximately half of the consumption being imported.

Commercial test

If the company is able to prove commercial success of the technology, it can license it for a fee to other refining companies. Indian Oil is already in talks with a couple of prospective customers, according to Sanjiv Singh, Director (Refineries). While refusing to name them, Singh said that talks were at an “advanced stage” and that one of them was from outside India.

Indian Oil has outsourced refinery functions such as mechanical, civil and electrical maintenance, manning of the hydrogen and nitrogen plants, firefighting, crude oil handling and finished products despatches to outsiders in an effort keep the employee roll lean.

The core areas of the refinery alone will be manned by company employees numbering less than a thousand.

According to WR Borbora, GM (HR), Paradip Refinery, this is the first location where Indian Oil has experimented with outsourcing. He said that the experience has been good till now.

The Paradip refinery enjoys an 11-year tax holiday from VAT payable to the Odisha government. According to Singh, it would help the company save about ₹1,500 crore a year which according to him is crucial to the refinery’s viability. Given its location on the east coast, crude oil is costlier by a dollar for every barrel as it has to be shipped around the southern peninsula.

The much-delayed refinery will be dedicated to the nation by Prime Minister Narendra Modi on February 7.

(The writer was in Paradip at the invitation of Indian Oil)

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