Keen on enhancing energy ties with India, Iraq has evinced interest in having a partnership in Indian Oil Corporation’s (IOC) upcoming Rs 30,000 crore Paradip refinery project, and with Centre also eager to take the bilateral relations to the next level, discussions are likely to centre around a possible tie-up in the project during the ongoing visit of the Islamic nation’s Deputy Prime Minister for Energy Hussain Ibrahim Saleh al-Shahristani.
Sources privy to the development said that though the Paradip refinery - which is almost 90 per cent complete and is likely to be fully commissioned by March 2014 - is a solo project of IOC, both the nations could look at the feasibility of having a partnership where Baghdad could send shipments of crude oil to Paradip, and get valuable foreign exchange in return.
Official sources informed that as of now the discussions are at a very preliminary stage as Iraq has only evinced interest in Paradip project, and anything concrete may only emerge when discussions will take place with the Iraqi leaders.IOC officials also confirmed that Iraq has shown interest in seeking cooperation in their Paradip refinery project but added that things are only in the realm of possibility as of now.
In case things firm up on a possible tie-up between Iraq and India on Paradip refinery project then discussions could take place on the possible equity sharing structure, sources said.Industry watchers said that New Delhi would stand to gain from the cooperation as it would get assured shipments from Iraq at concessional rates.
In fact during Petroleum Minister M Veerappa Moily’s visit to Iraq early last month, India had evinced interest in building refineries and petrochemical plants there and had also shown keenness to source lNG from its second largest oil supplier.Moily, who had led a 28-member delegation to participate in the 17th India-Iraq Joint Commission meeting in Baghdad, had expressed interest in setting up gas-based projects in Iraq, which could also include fertiliser plants.
Government is also looking at possibilities of building oil refineries and petrochemical plants in that country.The 15 metric million tonnes per annum (mmtpa) capacity Paradip refinery project of IOC is expected to take its refining capacity to over 80 mmtpa.The highly complex and among the most modern refineries of the country, has been conceived to process 100 per cent high-sulphur including 40 per cent heavy cheaper crude for better profitability. This energy efficient refinery will meet the spiraling domestic demand for lPG, petrol, diesel, aviation turbine fuel (ATF) and other petroleum products in India and abroad.
The refinery’s commissioning though has been delayed by almost two years as initially it was to start operations by early 2011, however owing to law and order issues, its commissioning will now happen only by March 2014.Owing to delays in its commissioning, the project also missed out on direct tax incentives announced by the Centre for projects of such magnitude. The deadline of the incentives expired on March 31, 2012 and till that time the Paradip refinery had not been commissioned.
The Odisha Government though would be giving a slew of waivers in sales tax, central sales tax and entry tax (for crude), to the project.