Indian Oil Corporation (IOC), the nation's leading oil company, announced plans to invest over Rs 210 billion to expand its Barauni refinery in Bihar and establish a city gas distribution network across the state, as stated by a senior executive on Thursday. The company intends to increase the Barauni refinery's capacity to 9 million tonnes per annum from the current 6 million tonnes, alongside setting up a petrochemical plant at an estimated cost of Rs 160 billion. Additionally, IOC will invest Rs 56 billion to create a network for retailing CNG to vehicles and providing piped cooking gas to households and industries in 27 cities of Bihar, Executive Director Suman Kumar shared at the Bihar Business Connect 2024 investor summit.

Kumar explained that IOC, which established the Barauni refinery in 1964, is the oldest investor in Bihar. The initial capacity was 3 million tonnes per annum, which was later expanded to 6 million tonnes. The new expansion will boost the capacity from 6 million tonnes to 9 million tonnes per annum, along with the establishment of a 200,000 tonnes polypropylene unit. Polypropylene, a key raw material for the plastic industry, will also be produced. The expansion and polypropylene plant are expected to be operational by the end of 2025.

Furthermore, IOC is investing Rs 56 billion to develop a city gas distribution (CGD) network across 27 districts of Bihar. Previously, the company, in collaboration with partners, invested Rs 95.12 billion to revive the Barauni fertilizer plant, which resumed urea production in October 2022. This initiative was part of a government effort to revitalise dormant urea units and boost the supply of domestically produced urea.

These investments align with IOC's broader goal of becoming a USD 1 trillion company by 2047. As a $110 billion oil major, IOC has set an ambitious capital expansion plan, planning to invest over Rs 2 trillion over the next decade in areas such as refining capacity, petrochemical integration, infrastructure, and renewable energy assets.

With India's growing economy, the nation's energy needs are expected to rise sharply. As part of its vision, IOC aims to meet 12.5 per cent of India's energy needs by 2050, reinforcing its position as 'The Energy of India.' The company is also expanding its refineries, including the Panipat Refinery, which is set to increase its capacity from 15 million tonnes to 25 million tonnes annually, and the Gujarat refinery, which will grow from 13.7 million tonnes to 18 million tonnes. These expansions will integrate lube and petrochemical production units.

While the first phase of petrochemical expansions at Panipat in Haryana and Paradip in Odisha has been completed, the expansion at the Gujarat refinery is scheduled to be operational by 2024-25. In addition to these initiatives, IOC is focusing on green technologies, such as hydrogen mobility, hydrogen transportation, biofuels, electric mobility, solar cooktops, and reducing its water footprint.

India, as the world’s third-largest energy consumer, is projected to see oil demand increase from 5.4 million barrels per day (bpd) in 2023 to 9.3 million bpd by 2040. To meet this growing demand, the country’s refining capacity will need to rise from the current 256.8 million tonnes per annum to 450 million tonnes. Moreover, India plans to add 50 GW of renewable energy capacity annually, aiming for a total of 500 gigawatts (GW) of installed renewable capacity by 2030.