BP, Indian Oil Corporation together will setup acetic acid plant in Gujarat

BP, Indian Oil cancel plans for acetic acid plant JV in Gujarat, India

6:46 AM, 19th June 2014
BP, Indian Oil Corporation joint venture

VADODARA, INDIA: UK-based BP and Indian Oil Corporation’s (IOC) have now decided to scrap the project to set up a one million tonne per annum acetic acid plant in Gujarat, India, as feasibility studies suggest that the plant is economically unviable. According to AMK Sinha, Director, IOC, the company board couldn’t approve the project, as it did not meet the minimum return on investments norms. “There are certain issues on the capital cost. It appears that the project is not meeting the requisite norms,” added Sinha.

“Despite the best efforts of our combined teams, we have faced a number of challenges, particularly with capital costs, in developing an attractive project. Earlier this year, BP and IOC had jointly decided not to pursue this project,” BP said in a statement to Financial Express.

BP said it has worked closely with IOC since 2011 to explore options of setting up an acetic acid joint venture in Gujarat. “Given the excellent relationship we enjoy, we will also continue to work on other joint opportunities in the petrochemicals arena in future,” it said.

“A joint feasibility study is under way to confirm the exact configuration of the project that would have a targeted start-up date in 2015,” both IOC and BP had said in a joint statement on November 23, 2011.

The feasibility study for new acetic acid plant was carried out in the vicinity of existing Koyali refinery operated by IOC. The proposed plant was to employ BP’s Cativa XL technology while gasification facilities would utilise petroleum coke feedstock from IOC.

 

© Financial Express News

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