Chennai Petroleum Corporation Ltd, (CPCL) is hoping that the Ministry of Environment and Forests lifts the moratorium on new projects in the Manali industrial region soon for it to go ahead with the residue upgradation and refinery expansion. “If the moratorium is removed, the first project we will implement is the residue upgradation project at a cost of Rs.3,110 crore. It will increase the yield of LPG, petrol and diesel by eight per cent and improve availability [of products] without any real capacity expansion,” according to S. Venkataramana, Managing Director (incharge) of CPCL.

The project would boost the gross refining margin by $1.5-2 a barrel. The incremental distillate yield, he explained, would be equivalent to one million tonne and help feed more products to Tamil Nadu and parts of Karnataka and Andhra Pradesh.

The ban on new projects, including expansion, in Manali was imposed in January, 2010, with the Cumulative Environment Pollution index, pertaining to effluents, air and solid waste, exceeding the limit. After initiating measures to address the issues, the units through the Manali Industries Association appealed to the Ministry to reconsider its decision.

“We have also written to the Chief Minister stating that an early action in this regard would be beneficial considering that Rs.5,000 crore projects not just of CPCL, but also of Tamilnadu Petroproducts, Cetex Petrochemicals and Indian Additives are pending,” he told The Hindu in an interview.

Final detailed feasibility report for the residue upgradation has been completed and investment approval obtained for the project. From the date of environment clearance, it would take 33 months for completion.

“In the next 4-5 years, we want to go ahead with our six million tonne refinery expansion project in Manali. We have sufficient land available and already completed pre-feasibility study,” he said, adding that there would be considerable demand for petroleum products in the region even after commissioning of the Nagarjuna refinery in Cuddalore.