Economy News

Indian Oil Corporation to expand its Chennai refinery at Rs 31,500 crore

Indian Oil Corporation or IOC is about to expand its Chennai refinery at an expense of Rs 31,500 crore via joint venture.

As on Friday, the Chairman of IOC, Shrikant Madhav Vaidya stated that the JV will be done with its subsidiary and strategic financial investors.

Indian Oil Corporation and its subsidiary Chennai Petroleum Corporation will now hold 25 percent share each in this joint venture.

This JV will set up a refinery yielding 9 million tonnes per year. Vaidya also added that the remaining 50 percent shares will be held by the financial investors.

So far, as per the sources, the IOC is planning to replace its 1 million tonnes per year Nagapattinam refinery of CPCL with a brand new 9 million tonnes unit.

Vaidya  also clarified that the refinery will be set up as JV of CPCL and IOC. He asserted on the remaining balance sharing with the strategic and financial partners.

Right now, NOIC holds a 15.4 percent stake in CPCL and was also eager to participate in the growth project.

Also, IOC holds a 51.89 percent share in CPCL wherein the expansion originally costed Rs 27,460 crores.

This cost is now estimated to be Rs 31,500 crore. This project will also be funded in 2:1 debt-equity ratio.

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