8 Jul 2012

Proposal of the Government of Tamil Nadu to set up a Petroleum Chemicals and Petrochemicals Investment Region

The Cabinet Committee on Economic Affairs today approval the proposal of the Government of Tamil Nadu to set up a Petroleum Chemicals and Petrochemicals Investment Region (PCPIR) in the Cuddalore and Nagapattinam districts of the State. This is the first PCPIR to be approved after PCPIRs in Andhra Pradesh, Gujarat, West Bengal and Orissa. 

A total investment of about Rs.92,160 crore is expected in the TNPCIR, which includes committed investment of Rs.22,160 crore. It envisages development of physical infrastructure such as roads, rail, air links, ports, water supply, power, desalination plant, CETP etc. at a total cost of Rs.13,354 crore. The PCPIR policy prescribes that infrastructure will be created/upgraded through Public Private Partnerships to the extent possible and Central Government will provide the necessary Viability Gap Funding (VGF). Accordingly, Government of Tamil Nadu has sought support from Government of India involving a commitment Rs.1143 crore on account of VGF funding for two road- related projects, CETP and desalination plants and Rs.1500 crore of direct budgetary support for a rail project. 

The project will be in the Cuddalore and Nagapattinam districts in the coastal belt of Cuddalore, Chidambaram, Shirali and Tarangambadi Talukas. It will cover an area of 256.83 sq. kms. with a processing area of 104 sq. kms. and the balance for non-processing activities and will include residential, commercial and other social and institutional infrastructure. 

Nagarjuna Oil Corporation Limited (NOCL), a Joint Venture of Tamilnadu Industrial Development Corporation Limited (TIDCO) and Nagarjuna Fertilisers and Chemicals Limited (NFCL), the flagship company of Nagarjuna Group, has been identified as one of the Anchor Tenants for the PCPIR. NOCL is setting up a 6 million metric tons per annum refinery project at Cuddalore, Tamil Nadu at a total cost of Rs.9660 crore. The project activities have commenced and the target date of completion of refinery is September 2013. NOCL has also finalized in-house configuration mapping for expansion of the refinery by 9 million tons per annum and bringing the total crude processing capacity to 15 million tons per annum by 2015-16. Apart from regular petroleum fuels that are expected from this expansion, NOCL plans to set up a Xylene production facility, Purified Terephthalic Acid (PTA) – plant and a Propylene recovery unit. The second Anchor Tenant is Chennai Petroleum Corporation Ltd. (CPCL) , which is planning to establish an integrated 15 million tonnes per year capacity refinery cum petrochemical complex. It will have a grass root refinery along with ethylene cracker, downstream derivative units as well as aromatic complex Para-Xylene. The project is designed for production of 1.2 MMTPA of Ethylene. It envisages investment of Rs.40,000 crore beyond the period 2015. 

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