IndianOil has got the approval from its board to expand the crude oil processing capacity of its refinery in Gujarat state from 13.7 to 18 million metric tonnes per annum (MMTPA) with an investment of about INR15,034cr ($2.4bn).

The Indian petrochemical company said that the project, which will boost the Gujarat refinery's capacity by 4.3MMTPA, will help in catering to the increasing demand for products in the region.

According to IndianOil chairman Sanjiv Singh, the proposed new refinery configuration will consider the possible disruptions in the fuel supply and demand scenario in the future. Singh said that the refinery will have built-in flexibility in its operations for integrating strongly with downstream petrochemical units.

As part of the expansion project, IndianOil will install a new 15-MMTPA Atmospheric Vacuum Unit (AVU) and its associated utilities at the refinery. These will replace the existing four atmospheric units and a couple of vacuum units commissioned at different stages of the phase-wise capacity expansion of the Gujarat refinery.

IndianOil will replace them as they have aged and are outdated in design while being small in capacity. Also, they are now deemed to be no longer energy-efficient as per the petrochemical firm.

Singh said: “Gujarat Refinery, which went on stream in October 1965 as a 1 MMTPA unit, heralded India’s capabilities to build refineries on its own. In the same vein, we are now proposing to incorporate IndianOil's own R&D technologies for both IndMax and kerosene hydrodesulphurisation units.

“The IndMax unit is being designed for high yields of propylene, for which a polypropylene (PP) unit of 420 TMTPA capacity is being set up as a downstream petrochemical unit as part of the refinery configuration.”

Apart from the Stage-I approval for the Gujarat refinery expansion, the IndianOil board has also given its nod for the company to acquire up to 50% stake in GSPL LNG. A joint venture of Gujarat State Petroleum Corporation (GSPC) and Adani Enterprises, GSPL LNG will be constructing a liquefied natural gas (LNG terminal) of 5MMTPA capacity at the Mundra Port in Gujarat.