MRL's ambitious plans

S. Rammohan, chairman & managing director, Madras Refineries Ltd, says his company will be expanding its refinery at Manali by utilising available infrastructure like power and water at a cost of about Rs 2,360 crore. The secondary processing facility (Hydrocracker) is planned for this three-mpta refinery expansion by optimising process integration with the existing Fluidised Catalytic Cracking Unit (FCCU).

The company has obtained clearances from the Public Investment Board, and the central and state Pollution Control Boards, and commitment from Chennai Metro Water and
Sewerage Board for supply of water. "We are waiting for the green signal from the Cabinet Committee on Economic Affairs, Government of India, which incidentally is a formality," says Rammohan.

Pre-project activities like preparation of process packages, selection of licensors for secondary processing, soil investigation and site grading have been commenced. The expansion is to be completed in 36 months from the date of getting all clearances.

With a view of optimising efficiency and using the refinery residue, MRL is planning   to set up a 500 MW power project at Manali, partnering with PSEG Global and L&T. While the total project cost will be around Rs 3,100 crore, MRL will be contributing Rs 250 crore to the equity (36 per cent). PSEG
Global and L&T will contribute 26 per cent each. "We are talking with Tidco and the State Electricity Board for taking the balance equity," says Rammohan. PSEG Global is talking with Shell and Texaco to acquire the Integrated Gassification Combined Cycle (IGCC) technology for the project.

That aside, on MRL's drawing board is a plan to set up a permanent jetty facility at Nagapattinam for receiving crude oil for its CBR. Once commissioned, the jetty facility can be used for bringing offshore crude directly to CBR, says Rammohan. According to him, the jetty will not only handle crude oil but also petroleum products and pave way for transhipment. Relevant technical studies have been completed and the company is evalutating the tenders for awarding the contract, so as to commission the project at least by June 2001.

Yet another interesting investment to be made by MRL is picking up equity stakes in the petroleum product pipeline to be laid by Petronet CTM Ltd. The company recently got the shareholders' approval to put in Rs 60 crore in the project. The pipeline will be crucial for the distribution of petroleum products to Trichy and Madurai.

More than the additional investments, what will be quite interesting for the future is the consequence of the centre transferring its 52 per cent holdings in MRL to IOC. The moot question then will be whether IOC will allow MRL to do its own marketing or have it as its sourcing base for products.

Only recently, MRL commissioned its own retail outlet at Sriperumbudur, near Chennai. "We have to get the government nod for doing that on a major scale.
We will consider it seriously two years down the line," says Rammohan. Last fiscal, the company clocked Rs 671 crore sales by direct marketing of  value-added products like Linear Alkyl Benzene (LAB), propylene, and polybutene feedstock.

Speaking about the Rs 43.06 crore private placement offer to one of the promoters, National Iranian Oil Company (NIOC), Rammohan says that the delay in subscription is due to certain amendments proposed by NIOC. With the amendments finalised, NIOC is expected to bring in the balance money soon. The company has made a payment of Rs 27.86 crore in January 1998.