After the upgradation of its largest refinery, the Koyali refinery in Gujarat, Indian Oil Corporation (IOC) is now keen on upgrading its 8 million tonnes per annum (mtpa) Mathura (Uttar Pradesh) refinery by setting up a coker unit, which will help process cheaper heavy crude varieties and help the company increase its refinery margins.

IOC’s refineries at Digboi, Guwahati, Panipat and Barauni have coker units and the Koyali refinery is set to get one by 2009. The Panipat refinery, for instance, processes 1.5 mtpa of heavy crude, out of a total of 12 mtpa of crude processed. These refineries were designed to process indigenous crude oil.

However, with increasing imports of crude, there is now a need for the refineries to be able to process all types of crude oil from all parts of the world, especially since heavy crude is cheaper than the lighter varieties. This is an advantage enjoyed by Reliance’s Jamnagar refinery (margins of $11.7 per barrel) over PSU refineries, and a gap that IOC is fast looking at bridging by modernising its plants. “The coker unit will require an investment of Rs 1,000 crore, and will yield a minimum return of 20 per cent. Expected rate of return will be around 30-40 per cent,” said IOC director (refineries) B N Bankapur.

There has been concern over the development of the refinery due to the impact of industrial pollution on the Taj Mahal. The company will need permission from the Ministry of Environment and Forests and plans to send a proposal to the ministry saying that the level of emissions would not increase with the coker plant.

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