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Chennai Petroleum Corp Ltds plan to build a 1,80,000 barrels per day (bpd) refinery in Nagapattinam, Tamil Nadu, has been delayed by two years and is now scheduled for completion by the end of 2027, according to the companys head of finance Rohit Kumar Agrawala. The delay comes amid Indias push to expand refining capacity as it is set to drive global oil demand growth between 2023 and 2030, as noted by the International Energy Agency.
Originally, Chennai Petroleum intended to finish the construction by the end of 2025. However, changes to the projects capital structure and revised cost estimates have led to this delay. The capital structure has been modified, with parent company Indian Oil Corp taking a 75% stake in the joint venture, while Chennai Petroleum retains the remaining 25%.
The projects estimated cost has been adjusted to ?36,400 crore ($4.36 billion), with approximately 66% of the funding coming from debt. This is a significant increase from the previous estimate of ?29,400 crore outlined in a recent stock exchange filing by Chennai Petroleum.
Chennai Petroleum also operates the 2,10,000 bpd Manali refinery in Chennai, which will undergo a month-long maintenance shutdown in July-August this year, according to Agrawala.
Despite the delays, the new Nagapattinam refinery is part of Indias broader strategy to meet growing energy needs as the nation becomes an increasingly important player in global oil consumption. The upcoming refinery will bolster Indias refining capacity and contribute to the countrys role as a major oil consumer and producer. |
