Russia's Rosneft plans to build PP plant at Nayara's India refinery

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Russian oil and gas group Rosneft is spearheading a move to develop polymer production in India through its recently acquired local subsidiary, Mumbai-based Nayara Energy Ltd.

Preliminary plans have been unveiled to construct a 450,000tpa polypropylene production plant at Nayara Energy’s Vadinar oil refinery in Gujarat state, India, which is scheduled to go on stream in 2022.

This project, if it goes ahead, will enable the Russian energy group to enter the Indian petchems market one of the fastest growing in the world.

In a €743m project, Nayara Energy, known as Essar Oil prior to its purchase in 2017 by Rosneft and its international partners, aims to build a ‘propylene recovery unit’ to extract the refinery’s C3 light gas. This product will be used for PP in the downstream polymer plant.

This represents the first phase of a major refinery development programme which is currently “undergoing economic evaluation”. The future of the PP project depends on the outcome of this study and a final decision is due later this year, according to Rosneft.

Last month, senior managers from the Russian oil company, which holds a 49.13% stake in Nayara Energy, held talks on state cooperation with Indian Prime Minister Narendra Modi during the Vibrant Gujarat Global Summit 2019.

The Russian-backed petchems project received a welcome boost in January as the Gujarat state government signed a memorandum of understanding with Nayara Energy. This “facilitates the implementation” of the development plan for Vadinar which is considered the Indian subcontinent’s second biggest privately operated refinery.

Nayara Energy’s Vadinar site, with an annual throughput of 20m tonnes, has an oil depot terminal  and a coal fired power plant and is served by a deep-water port with annual capacity of 58m tpa. The port has a crude oil and finished product storage capacity of 3 million m3 a year.

Nayara Energy, which produces a range of petroleum fuel products, manages a chain of 4,900 retail filling stations across India with another 2,600 outlets at various stages of completion. 

Investment at Vadinar is expected to strengthen Nayara Energy’s financial performance and improve the firm’s production efficiency in the medium term, said Rosneft.

Essar Oil was acquired by Rosneft with a consortium led by global commodity trading firm Trafigura and UCP Investment Group. 

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