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Odisha Eyes $14 Billion Petchem Projects To Cut Imports, Indian Oil To Invest

Indian Oil Corp. Ltd., the country’s largest refiner by capacity, will invest half of the amount in a naphtha cracker facility.

<div class="paragraphs"><p>A naphtha cracker facility.&nbsp;Source: Bloomberg</p></div>
A naphtha cracker facility. Source: Bloomberg
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The eastern Indian state of Odisha is expecting a 1.2 trillion rupees ($14.1 billion) investment over the next 10 years to build a petrochemical hub near the Bay of Bengal, according to a senior government official.

Indian Oil Corp. Ltd., the country’s largest refiner by capacity, will invest half of the amount in a naphtha cracker facility, which will help develop a new downstream market for secondary products such as agrochemicals and pharmaceuticals, said Hemant Sharma, additional chief secretary of the state’s industries department.

The industrial hub will help India curb imports of petrochemicals and elevate Odisha as a new industrial powerhouse, he said in an interview.

The mineral-rich state is counting on a demand surge for chemicals and the country’s push for self-dependence. Global trade tensions present an opportunity for India to draw manufacturing investment, and Odisha is courting businesses through a raft of incentives, Sharma said. These include land availability near the port, cheaper electricity, capital investment subsidy and adequate water supply, he said.

Indian Oil signed an initial pact last month to set up a dual-feed cracker and associated downstream units for the production of phenol and polyethylene in Paradip, where it already operates an oil refinery with a 300,000 barrels a day capacity. The company said it would invest about 610 billion rupees in the project.

Other businesses may follow suit and move their overseas downstream petrochemical units to Paradip, Sharma said, without disclosing names due to confidentiality agreements. Odisha’s strategy to attract investors involves providing improved infrastructure, rivaling the global standards found in China and Southeast Asia, Sharma said.

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