IOCL Haldia Refinery

Chapter-VI
CASE STUDY- II
HALDIA REFINERY - INDIAN OIL CORPORATION
An oil refinery is an industrial process plant where crude oil is processed and refined into
more useful petroleum products, such as gasoline, diesel fuel, and asphalt based fuel,
heating oil, kerosene and liquefied petroleum gas. Oil refineries are typically large
sprawling industrial complexes with extensive pipeline running through out, carrying
streams of fluids between large chemical processing units.
Since petroleum is essentially a mixture of hydrocarbons, the chemical made from it are
nearly all organic chemicals. They stray over into the inorganic field only for specific
reasons. Carbon black and hydrogen cyanides are commonly classed as inorganic
chemicals on an arbitrary basis. Sulphur is present as an undesirable impurity in certain
crude oils, and may be recovered either as the element or as sulphuric acid. In ammonia
production, it is the hydrogen which is required from petroleum. The development of
chemicals from petroleum has not, to a major degree, been at the expense of other raw
materials, but rather complementary. Many of the chemicals made from petroleum have
developed negligible proportions to major industrial products within a period of 10-15
years. The availability of a range of petroleum raw materials opened up a number of new
horizons for the chemical industry. The successful development of the opportunities thus
created was a challenge both to the petroleum and chemical industries.
Haldia refinery is one of the seven petroleum refineries owned and operated by Indian Oil
Corporation Limited, the largest commercial enterprise in the country. Haldia refinery
stands fourth in the chain of the seven operating refineries of the corporation. It is the
only lube based and coastal refinery of India and as such assumes a special place amongst
Indian Oil corporation refineries. Haldia refinery refines crude oil into petroleum
products. It is a combination of fuel and lube refinery and produces both the fuel products
and Lube Oil Base Stocks (LOBS) for manufacture of finished lubricants in the Indian Oil
Corporation owned Lube Blending Plants at Kolkata, Chennai and Mumbai. It is the first
refinery in the country to obtain the ISO- 9002 accreditation in 1992 and since then has
acquired both the ISO- 14001 Environmental Management System and Occupational
Health and Safety Management System (OHSAS 18001) certifications.
Chapter-VI Haldia Refinery - Indian Oil Corporation 103

The refinery was commissioned in January 1975. The original design capacity of the
refinery was 2.5 Million Metric Tonnes Per Annum (MMTPA) of crude processing.
Addition of a new crude distillation unit increases the capacity of the refinery to 4.6 Million
Metric Tonnes Per Annum. The present operating capacity of the refinery is 6.0 Million
Metric Tonnes Per Annum with matching secondary processing facilities.
The refinery is located on the banks of river Hugh at the Haldia Port Industrial Complex on
the Purba Medinipur district of West Bengal. It is about 130 kilometres from Kolkata and is
well connected through railroad and waterways. The principles of finding a construction
site for refineries are similar to those for other chemical plants.
Satellite Imagery of Haldia Refinery-lndian Oil Corporation,

West Bengal
Source: Google Earth view, 2011.
Fig. 6.15
/. The refinery has to be reasonably far from residential areas. Haldia refinery is
situated far away from Haldia township area. Haldia township is the main
settlement area of Haldia. The refinery is located at Ranichak and settlements have
shown in and around this industry.
ii Raw materials access and products delivery to markets should be ease. The Haldia
port offers scientific container handling services. The Haldia Dock Complex is
Chapter- VI Haldia Refinery’ - Indian Oil Corporation 104

already handling 43.54 million tonnes of cargo per annum which is expected to be
increased. The Haldia Dock Complex can boost of having the largest dry dock
facilities in India. The cheapest container rate, the lowest pre-berthing detention of
vessels and the most modem Vessel Traffic Management System are some of the
facilities that Haldia refinery enjoy.
UL Haldia refinery is located at Haldia Industrial Area in Haldia town. The area is
basically rural in nature and sparsely populated. The neighbouring industries include
Haldia Petrochemicals Limited, Hindustan Leaver, Shaw Wallace, Chloride India,
Mitsubishi etc. There are no forests of wild life sanctuaries around the plant area.
There are no historical or archeological monuments either. The refinery is devoid of
hilly or mountainous areas, defence installations and airports etc.
iv. Haldia oil refinery has its own captive power plant. It has four boilers of 3x 125
metric tonnes per hour and 1x150 metric tonnes per hour capacity. Four turbo
generators of 3x10.5 mega watt and 1x16.5 mega watt capacity. The refinery again
buys a modem gas turbine of 20 mega watt capacity with 100 metric tonnes per hour
steam generation. To meet additional requirements the refinery is going to set up
another gas turbine.
For refineries, which use large amount of process steam and cooling water, an abundant
supply of water is important. For this reason, Haldia refinery is located at the confluence
of river Hugh and Haldi. It not only meets the demand for large amount of water but
also helps Haldia port in the shipment of both raw materials and finished products.
Although the crude oil transport is mainly done through pipelines, but the method is
often used to deliver output of products such as fuels to their bulk distribution terminals.
Fresh water requirement of the refinery is met through boring water or a number of tube
wells located inside and outside the refinery. At present a river water-processing unit
was established by the state government at Geokhali which supplies the required water
to the refinery. To accelerate its business prospects and to keep in pace with the ever
increasing demand for export of bitumen, the refinery has set up a permanent tanker
loading facility for loading of bitumen into ships at the Haldia oil jetty-1.

Plate.3
Haldia jetty, storage place of imported crude oil
Plate.4
Haldia Refinery -Vacuum Distillation Unit Project
Source: httpWwww.google.com.
Chapter- VI Haldia Refinery - Indian Oil Corporation 106

Crude oil is formed from the preserved remains of pre-historic zooplankton and algai,
which have been settled to the sea (or lake) bottom in large quantities. Under anoxic
condition formed over millions of years from the remains of tiny aquatic plants and animals
that lived in ancient seas due to compression and heating of ancient organic materials over
geological time. The oldest oil bearing rocks date back to more than 600 million years, the
youngest being about 1 million year.
Table: 6.8 Production and

Production and consumption of petroleum products
consumption of petroleum
in India, 2003-07
products in India, 2003-07 160 ---------------------------------------------------------------------
Production and consumption
140-------------------------------------------------------------pr-
in million metric tonnes
Production Consumption
120 _i [~1—i :*:■
>: rK~TTn-----
Year
In million metric tonnes
.V i •V
,vv
1UU ■ , v ■
2003 109 104 •V .V iV !v

so - - >: —— « ■
2004 118 108 6o-
• -§ 1 &
i ■
— > ——ft — ft
2005 123 112 40 £ I g
2006 124 113
-
20-ft —£ ——
%
*
— V
1
s s
i
K
—ft —ft —ft ■
2007 140 121 o hi ,:¥ :*

^ P$
Source: Haldia Refinery -IOC, 2009 2003 2004 2005 2006 2007
Years
0 Production □ Consumption
Source: Haldia Refinery -IOC, 2009 (Table-6.8)

Fig. 6.16
Although various types of hydrocarbons- molecules made by hydrogen and carbon atom
form the basis of all crude oils, they differ in their configurations. The chemical structure
of petroleum is composed of hydrocarbon chains of different lengths. Because of this,
petroleum may be taken to oil refineries and the hydrocarbon chemicals separated by
distillation and treated by other chemical processs, to be used for a variety of purposes. It
can be a straw coloured liquid or tar-black solid. It is classified by the location of origin ie.
West Texas Intermediate, West Texas, Brent, Dubai. Refiners may distinguish it on the
basis of sulphur content. They refer to it as 'sweet' when it contains relatively little amount
of sulphur and' sour' which means it contains substantial amount of sulphur. The number
of carbon atoms determines the relative weight and density of the oil. Gases generally have
one to four carbon atoms, while heavy oils and waxes may have 50 and asphalt has 100
carbon atoms.
Composition of crude oil: Complex mixture of thousands of chemical compounds that

are mostly composed of carbon and hydrogen (called hydrocarbons) ranging from 1 to 60
carbon atoms. It contains small amount of sulphur, oxygen, nitrogen and metals. Most of
the above are chemically combined with carbon and hydrogen and treated as impurities
and contaminants.

Table:6.9 Components of crude oil
Components Weight (in percentage) Components Weight (in percentage)
Carbon 83-87 Nitrogen 0-1
Hydrogen 11-14 Oxygen 0-0.5
Sulphur 0-3 Metals 0-0.2
Source: Haldia Refinery -IOC, 2009
Small quantities of metals are usually

Components of crude oil
present in crude oil. Such as Nickel,
45000
Vanadium, Iron, Cobalt, Lead, Copper, 40000
43
CD
O)
03 35000
Cadmium, Magnesium, Zinc, Alluminium -4—'
c
30000
<D
etc. After considering availability of 20) 25000
Q_ 20000
indigenous crude oil, balance crude oil is 15000
JZ 10000
required to be imported. The crude oil is D)
Q) 5000-
sourced mainly from Gulf countries, West 0- oc c0)
nan a
nO u> 0CD c0CJ) B(A
c
African countries, Malaysia, Brunei etc. CD 2 O 0 >N
Crude oil is transported through tanker ° ■§, C/)

□ Weight of crude oil |
vessels and discharged at sand heads for components
Haldia refinery. Source: Haldia Refinery -IOC, 2009(Table-6.9)

Fig. 6.17
Table:6.10 Crude oil price in importing

countries of Haldia refinery, 2008
Price (in dollar/ Crude oil price in importing countries of
Place I Halcia refinery, 2008
8288588388
Oil price(dollar per barrel)
barrel)
Brent 108.97
Dubai 103.41
Indian Basket
(small oil
105.77
extracting
region in India)
Oman 104.09 Brat CXPa ManBasket OrBn
Source: Haldia Refinery -IOC, 2009 Raced import 0 Crude oil price
Source: Haldia Refinery -IOC, 2009(Table-6.10)

Fig. 6.18
Crude oil procurement and payment: Tender for crude oil procurement is finalized by
International Trade by term contract (mainly annual contract with fixed term) and spot
contract (monthly or quarterly). After finalization of contract, a copy is forwarded to

shipping organization for execution. Shipping organization finalizes with the supplier and
line up vessel for loading. A load port surveyor is appointed for executing loading
function on behalf of buyer at load port.
From the lighter age (that is transfer of crude from mother vessel VLCC, to smaller size
vessel known as daughter vessel) operations, Indian Oil Corporation Limited is hiring
vessels on time charter. Both foreign flag as well as Indian flag vessels are taken on hire.
For crude requirement of Haldia refinery mother vessel tankers come at Kakinada since
Haldia port can not accommodate mother vessel tankers due to some restrictions.
Crude oil to Haldia fed refineries are supplied through daughter vessels. Indian Oil
Corporation Limited has entered into agreement with M/S Kakinada Seaport Limited
(KSPL) for carrying ship to ship transfer operation at Kakinada.
Refining process: The process employed in refining operations can broadly be classified
into three categories. A. Separation of crude oil, b. Conversion of hydrogen molecules
and c. Treating of crude oil fractions. Separation of crude oil is classified into two parts:
The Atmospheric Distillation Unit includes main operating facility and auxiliary
operating facility. The main operating unit has two section, crude distillation section and
gas plant section. The main units of crude distillation sections are desalter, pre
fractionator, main- fractionator, naphtha stabilizer, and naphtha splitter.
The salt of crude is removed by desalter technique. It is then passed in pre-fractionators

chamber where it is heated, and then it is passed in main fractionator’s chamber where
distillation takes place and various products are produced. The naphtha is splitted into two
grades. From the liquefied petroleum gas, the de-ethaniser ethane is removed and then
washing of liquefied petroleum gas by amine takes place. This liquefied petroleum gas
passed to de-propaniser where the propane is passed in to different unit and naphtha is
washed first by caustic and then by water.
First the crude oil entered in to the distillation unit. Heat increases from 250°C to 500'C.
As the heat increases the pressure will decrease. At the very first step liquefied petroleum
gas has been collected from the top vapour. Heavy nutrients like kerosene, high speed
diesel are collected from the lower portion of the distillation unit. There are separate trays
for different products inside the unit. Different products are separated automatically in to
different trays. When the trays are filled with the respective products at a certain limit, it

is transfered to that unit through the pipelines. The crude is distilled to yield various
products like liquefied petroleum gas, naphtha, CRU feed naphtha, kerosene, aviation
turbine fuel, mineral turpentine oil, high speed diesel, jute batching oil and reduced crude
oil. The products remained in intermediate qualities which needs further processing to yield
final products.
Vacuum Distillation Unit: The reduced crude oil from atmospheric distillation unit is the
feed to a vacuum distillation unit. Here distillation is done in vacuum and at lower
temperature. The products manufactured from vacuum distillation unit are vacuum gas oil,
spindle oil, light oil, inter oil, heavy oil and vacuum residues. The various fractions are
processed further to yield various quality Lube Oil Block Stocks.
Table:6.11 Yield pattern of Vacuum Distillation Unit II of Haldia refinery, 2008
Designed yield Actual yield

Products
(in percentage) (in percentage)
Vacuum gas oil 7.99 9.35
Spindle oil 12.17 11.37
Light oil 14.78 17.46
Inter oil 20.17 17.42
Heavy oil 4.43 4.29
Vacuum residue 39.42 40.1
Yield pattern of Vacuum Distillation Unit-ll of Haldia refinery,

2008
45
Af\
4
Yield in percentage
D c n_ko c n o ur o i o c n c
GJCO
N3
Vacuum Spindle Light oil Inter oil Heavy oil Vacuum

gas oil oil residue
Components □ Design yield

HActual yield
Source: Haldia Refinery -IOC, 2009(Table- 6.11)

Fig. 6.19
Chapter-Vl Haldia Refinery - Indian Oil Corporation no

Major equipments, facilities and technologies used: Haidia refinery is engaged in
converting the raw crude oil into finished petroleum products. The major operational
facilities in the refinery include process unit, offsite facilities for crude receipt and
storage, utilities system for meeting the requirements of power, process steam, effluent
treatment plant and fire fighting facilities.
The process units of Haidia refinery are categorized into four blocks. They are Fuel oil
block, Lube oil block, Diesel hydro-desulphurization block, and Fluid catalytic cracking
unit. The details of units under these blocks are given in the following table.
Table:6.12 Different process units and their uses in Haidia refinery
SI. no. Name of process unit Technology used

Fuel Oil Block
1. Crude Distillation Unit
Fractionation of crude oil for physical separation
l(CDU-l) of various straight run cuts. The capacity is 3.6
million metric tonnes per annum. Design and
construction is collaborated with Techno, France
and Industrial Export, Romania.
2. Crude Distillation Unit Fractionation of in-house design. Capacity is 1.0
2(CDU-2) million metric tonnes per annum.
3. Catalytic Reforming Unit To produce Motor spirit component through
(CRU) catalytic reforming process designed by Technip,
France. Capacity is 0.196 million metric tonnes
per annum.
4. Kero-hydro desulphurization To reduce the sulphur content of Kerosene,
Unit(KHDS) Aviation Turbine Fuel (ATF), Russian Turbine
Fuel (RTF), and Mineral Turbine Oil (MTO).
Process is designed by Technip, France. Capacity
is 0.577million metric tonnes per annum.
Lube Oil Block
1. Vacuum Distillation Unit I Fractionation of reduced crude oil under vacuum
andll to produce lube. Process designed by industrial
Export, Romania.
2. Propane Deasphalting Unit Extraction of Asphalt to produce Lube Oil Base
Stocks (LOBS).Process designed by Industrial
Export, Romania.
3. Furfural Extraction Unit Improvement of lube through extraction of
aromatics. Process designed by Industrial Export,
Romania.
4. NMP Extraction Unit Improvement of lube through extractions by
aromatics. Process designed by EIL.
5. Solvent Dewaxing Unit Improvement of lube through extraction of wax
and toluene. Process designed by Industrial
Export, Romania.
6. Lube-hydro finished Unit Improving colours and stability of lube oil base
stocks through hydrogenation. Process designed
by Industrial Export, Romania.
Chapter-VI Haidia Refinery - Indian Oil Corporation 111

SI. no. Name of process unit Technology used
7. Soaker Visbreaking Unit Improving the viscosity of heavy ends for
production of fuel oil. Process designed by EIL.
8. Bitumen Treating Unit Production of bitumen. Process designed by
Industrial Export, Romania.
9. Catalytic Iso-dewaxing Unit Increase production of lube oil base stocks and
improving the quality of it. Process designed by
Excon Mobile.
Diesel Hydro- desulphurization unit
1. Diesel-hydrodesulphurization Reducing the sulphur content of diesel
unit components in the presence of hydrogen. Process
designed by UOP, USA.
0 Hydro Generation Unit Steam reforming of naphtha. Process designed by
Haldor Topsoe, Denmark.
3. Sulphur Recovery Unit Desulphurization of fuel gas and recovery of
sulphur. Process designed by Stork Comprimo,
The Netherlands.
Fluid Catalytic Cracking unit
1. Fluid Catalytic Cracking Unit Cracking of products ends in the presence of
catalyst to produce liquefied petroleum gas,
gasoline, diesel etc. Process designed by M/S
Stone and Webster, USA.
2. LPG Treating Unit For meeting the quality of liquefied petroleum
gas. Process designed by M/S Mercehem, USA.
3. Gasoline Treating Unit For meeting the quality of sulphur. Process
designed by M/S Merichem, USA.
4. Fuel Gas Scrubbing Unit For removing sulphur -dy -oxide. Process
designed by M/S Belco, USA.
5. Motor Spirit quality up For further improving the quality of Motor Spirit
gradation project (petrol). Process designed by Axens.
Profile of Employee: The refinery has total employee strength of 1542 comprising 456
executive and 1086 non-executive (2008).
Table:6.13 Man power position in Haidia refinery, 2008
Officer Staffs
Group Number Grade Number
A 135 I 03
B 98 n 01
C 76 in 13
D 48 IV 148
E 33 V 270
F 38 VI 205
G 06 vn 142
H 04 VIII 301
I 01
Total- 439 Total- 1083
(Officers+Staffs)=(0439+1083)=Total 1522

The minimum qualification for induction of an executive is Bachelor’s degree in
Engineering. In case of non-executive the minimum qualification for plant operations is
Diploma or B.Sc. For other categories, the minimum qualification is matriculation. Haldia
refinery mainly recruits local people excepting the officers. Here the employment has.
mainly done through the local employment exchange. The company has sent their
requisition to the employment exchange. The employments of officers of executive ranks
have been done through all India basis examination. Here the maximum age limit is 30
years.
Female workers are mainly engaged in the office work. The refinery does not have any
technical works for the female. Some women are working in the refinery hospital as a
nurse or female attendant. In the Haldia refinery, 56 female employees are working in the
office out of which 47 are office staffs and 9 are in executive rank. Among all the
employees in Haldia refinery, 97 percent are local and 3 percent are outsider. Lion share
of the outside employees are coming from Delhi, Orissa and Bihar. Very few come from
southern and western states.
Facilities provided to the employees:
• They have adequate number of houses for all employees in Haldia township area.
• The refinery gives product fund and ESI, statutory benefit at much higher rate
than normal 8.3 percent.
• The refinery has most generous medical facilities than any where in the country-
They are fully equipped 24 bed hospital with 24hours doctors and nurses. An
employee can avail of their health care facilities through out the country for his
treatment with free of cost.
• Two clubs are there in the township for officers and stuffs respectively. There are
libraries, both indoor and outdoor game," gymnasium, magazine, television etc.
• Canteen is highly subsidized. Meal coupon is found at the rate of Rs. lonly. But
the costs of meal which is provided to the employees are actually Rs. 50.
Chapter-VJ Haldia Refinery - Indian Oil Corporation 113

• The employees can enjoy the facility to get house building loan from Rs. 10 lakhs
to Rs. 16 lakhs depending upon the grade or rank at a rate of interest 5 percent
only. The rate is same for all officers and stuffs.
• Holiday home facility in various places in India with separate accommodation for
officers and staffs.
• Haldia refinery has given the creche facility for the female workers. When they
will be busy with their work in the refinery, they can leave their baby in the creche
safely.
Finished products from this refinery cover both fuel oil products and lube oil base stocks.
The fuel oil products include the followings:
Table:6.14 Products of Haldia refinery and their use
Serial no. Products Use

1. Liquefied Petroleum Gas (LPG) Domestic, cooking, industry
2. Naphtha Petrochemical, fertilizer
feedstock
3. Motor Spirit (MS)-petrol Petrol driven vehicles
4. Mineral Turpentine Oil(MTO) Paint industry
5. Superior Kerosene(SK) Domestic cooking, lighting
6. Aviation Turbine Fuel(ATF) Air crafts
8. High Speed Dieself HSD) Diesel driven vehicle
9. Jute Batching Oil(JBO) Jute industry
10. Furnace Oil(FO) Furnace
11. Lube Oil Base Stocks(LOBS) Lubricating oil
12. Bitumen Road paving, weather proofing
13. Bitumen emulsion Road paving
14, Micro Crystalline Wax(MCW) Cosmetic industry
15. Carbon Black Feed Stock Tyre industry
16. Slack wax Candle manufacture
17. Sulphur Sulphuric acid manufacture and
various chemicals

Finished products from the refinery move out by rail, roads, waterways and the pipelines as
illustrated below:
Table:6.15 Products despatch through different modes of transportation from

Haldia refinery, 2008
percentage of
Mode of
Products share to total
transportation
transportation
Motor Spirit, High Sulphur Diesel.
Naphtha, Aviation Turbine Fuel,
Rail
Russian Turbine Fuel, Superior 26
Kerosene, Furnace Oil.
All products except Lube Oil Base
Road by truck 15
Stocks
Entire quality of Lube Oil Base Stocks
Barges or Produced and some proportion of Tanker 1
Tankers Furnace Oil, Naphtha and High Speed Barge 7
Diesel.
Mineral Turpentine Oil, Naphtha,
Motor Spirit, Superior Kerosene,
Pipelines
Aviation Turbine Fuel, High Speed 41
Diesel.
Fig. 6.20
Table:6.16 Production details of Haldia refinery, 2007-2008

Raw Finished Months Raw Finished
Months materials products materials products
Quantity per metric tonnes Quantity per metric tonnes
Apr-07 530955.9 462390 Oct-07 204107.5 242614
May-07 484762.3 472894 Nov-07 549567 485934
Jun-07 480582.6 454425 Dec-07 475130.6 487868
Jul-07 505204.6 452796 Jan-08 437628.1 430956
Aug-07 552763 487612 Feb-08 471471.4 426131
Sep-07 380739.5 271678 Mar-08 542089.4 523952
Total 5615002 5199250


Fig. 6.21
The main market of Haldia refinery is in the eastern region of the country. However,
depending upon the requirements, the products produced from the refinery are supplied in
the other parts of the country as well while facilities are existing for export to international
market. The principal customers includes bulk customers like defense, railways, civil
aviation, fertilizer plants, petrochemical plants, border road organization, PWD etc.,
transport sector and domestic sector for liquefied petroleum gas.
Table:6.17 Deviation of crude oil price in importing countries of Haldia refinery

(January 2005 to March 2008)
Brent Dubai Indian Basket
Month/Year
Dollar per barrel
March’08 103.66 96.76 99.76
February’08 95.04 90.02 92.37
January’08 92.0 87.37 89.52
December’07 90.98 85.58 87.92
November’07 92.61 86.87 89.11
October’07 82.50 77.12 79.33
September’07 76.87 73.36 74.78
August’07 73.18 68.65 70.99
July’07 77.01 69.49 72.69
June’07 77.01 65.79 68.19
May’07 67.23 64.61 65.79
April’07 67.51 63.97 65.54
March’07 62.15 58.80 60.26
February’07 57.43 55.75 56.49
January’07 53.68 51.69 52.62
Chapter-Vl Haldia Refinery - Indian Oil Corporation 116

December’06 62.32 58.68 60.34
November’06 58.92 56.72 57.79
October’06 57.80 56.42 57.27
September’06 61.71 59.82 61.04
August’06 73.11 68.77 70.84
July’06 73.66 69.17 71.36
June’06 68.69 65.22 66.95
May’06 69.83 65.00 67.41
April’06 70.16 64.06 67.02
March’06 62.1 57.82 60.01
February’06 60.12 57.61 58.95
January’06 63.05 58.44 60.54
December’05 56.91 53.20 55.05
November’05 55.18 51.39 53.14
October’05 58.61 53.96 56.28
September’05 62.91 56.54 59.91
August’05 64.12 56.60 60.02
July’05 57.58 52.83 55.01
June’05 54.39 51.08 52.72
May’05 48.56 45.40 47.02
April’05 51.82 47.20 49.43
March’05 52.91 45.84 49.27
February’05 45.37 39.87 42.58
January’05 44.23 37.92 41.00

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Oil price(dollar per
_k
o orooc oo coo ooboo
barrel)
November 07
January 08
November 06
July '07
March'08
September 07
May’07
January '07
March'07
July '06
May'06
November'05
September ’06
January '06
March'06
September 05
July '05
January '05
May'05
March’05
’
’
’
’
Months
—Brent —Dubai —*— Indian Basket

Fig. 6.22
Impact of fluctuation of crude prices on Haldia refinery: The impact of fluctuation of crude
oil price in global market is clearly observed from the comparative particular account of the
refinery of the year 2005-06 to 2006-07 and 2006-07 to 2007-08.

Table:6.18 Account details of Haldia refinery, 2005-06 and 2006-07
2005-06 2006-07
Serial no. Account details
In Rs. Lakhs
1. Value of production 1098388 1364181
2. Cost of raw materials 1043521 1299647
3. Net processing cost 54867 64534
Account details of Haldia refinery,

2005-06 and 2006-07
1600000
1400000
Values in Rs. lakh
1200000
1000000 wm
wm
—
$>>>)
800000
600000 -
wm
wm
400000 -
wm
wm
>>>>>)
•>>>>)
200000 wm
wm
__
-
Value of Cost of raw Net processing

production materials cost
Account details
E9393 2005-06 •2006-07

Fig. 6.23
The above diagram shows that in 2005-06, value of production was Rs. 1098388 lakhs,
where in the year 2006-07, value was Rs. 1364181 lakhs. Thus there was an increase in
value of production of Rs. 265793 lakhs in 2006-07. In 2005-06, costs of raw materials
were Rs. 1043521 lakhs as compared to Rs. 1299647 lakhs in 2006-07. In 2006-07 cost was
increased by 2561261akhs.
Table:6.19 Account details of Haldia refinery, 2006-07 and 2007-08
Account details 2006-07 2007-08

5836290 5714991
Throughput (in metric tonnes)
In Rs. lakh
Value of production 1364209 1463994
Cost of raw material 1300258 1372202
Operating cost
a. power and fuel 1075 1114
b. chemicals, catalysts etc. 5069 4029
c. stores and spares 248 330
d. repairs and maintenance 5913 8267
e. establishment 13522 14593
f. general administrative expenses 4247 4560
g. depreciation 13619 13802
Contd..

Account details 2006-07 2007-08
h. head office expenses 1636 1861
Total processing cost 45329 48556
Net processing cost 44046 46766
Gross profit 19905 45026
Net profit 18742 44444
Net processing cost 44046 46766
Gross profit 19905 45026
Net profit 18742 44444
Operating cost of Haldia refinery ,2006-07 and 2007-08

16000 -
establishment depreciation
“ 14000 -
C 12000 - repairs and
oo 10000 - chemicals, maintenance general
O sz catalyst etc. idministrative
° 8000 -
a
cn JS expenses
•ji 6000 - head office
§ 4000 -
power
and fuel
stores and
spares
expenses
O 2000 -
o- ■
Type Of costs 02006-07 0 2007-08
Fig. 6.24
Production value of Haldia refinery, Cost of raw materials in Haldia

2006-07 and 2007-08 refinery, 2006-07 and 2007-08
1480000 1380000
Rs. lakh
1460000 1360000-
values in Rs. lakh
1440000
1340000
1420000
1320000-
in
1400000
A H
Values
1380000 1300000-
1360000 1280000- ii
1340000 / 7\w K\v
1260000-
1320000
2006-07 2007-08
1300000
2006-07 2007-08 cost of raw material
Years
02006-07 02007-08
Production value
0
ofS'
ON
2
Fig. 6.26
In 2006-07, production was Rs. 1364209 lakhs and in 2007-08 production was Rs. 1463994
lakhs. Thus there is an increase in production of Rs. 99785 lakhs in 2007-08. In 2006-07 and
2007-08, cost of raw materials was Rs. 1300258 lakhs and Rs. 1372202 lakhs respectively.
In 2007-08, the cost of raw materials increased by Rs. 71944 lakhs. From the above data it is
observed that the increase of raw materials price is less than

value of production in 2007-08, resulting in increase of gross profit and net profit in 2007-
OS than 2006-07. It is evident that as the expenses of raw materials including crude oil is
decreased; there is automatic gain in gross profit. As we know that Haldia refinery incurred
its maximum expenses on raw materials, 'crude oil' which is mostly imported from out side
of India and especially from OPEC countries. The rapid rise in crude oil prices has increased
the cost of production.
Table:6.20 Crude oil prices in Haldia refinery, 2006-07 and 2007-08

High sulphur crude Low sulphur crude
Months (value in Rs. per metric tonne) (Value in Rs. per metric tonne)
2006-07 2007-08 2006-07 2007-08
April 19911.24 20115.80 25051.14 22616.96
May 22677.56 20800.72 26198.35 23001.71
June 22160.40 20069.57 25875.24 22936.42
July 23836.52 20802.60 26303.07 23468.03
August 23795.52 20904.52 27499.81 24496.52
September 24415.39 20755.71 27657.53 24316.49
October 21130.42 23086.28 25077.69 24471.66
November 19562.51 25481.05 22323.0 26467.83
December 20406.42 25826.0 21516.92 28266.36
January 19585.99 26184.37 22637.67 29355.79
February 18596.25 26627.38 19752.81 29143.21
March 18652.64 28536.98 20535.59 31244.33

Fig. 6.27

(/> High sulphurcrude oil price in Haldia refinery,
0)
c 2006-07 to 2007-08
c
o
35000
30000
25000
<5 20000
15000
CC 10000
| 0
TO >> 01
July
February
March
October
August
January
November
ro
December
September
> Q. c
< 3
00
♦
zr
ho
-v l
■ 2006-07
w
0
3
oo
1
Fig. 6.28
Table6.21 Net value of products in Haldia refinery, 2005-06 to 2007-08
Net value (In Rs. lakh)

Name of products
2005-06 2006-07 2007-08
Liquefied Petroleum Gas 17409.23 19447 24175.26
Motor Spirit 20904.79 20190 23732.18
Motor Spirit-EIII 20948.11 20180 22442.99
Motor Spirit- extra premium 20899.82 20872 21924.13
High Speed Diesel 21868.17 21769 23628.14
High Speed Diesel-EIII 21887.10 21236 22796.98
LSHFHSD 21887.10 21180 22283.20
Superior Kerosene Oil 9527.12 8984 12877.98
Net value of products in Halda refinerv

70000 2005-06 to 2007-08
-C
TO
if)
cr
c
(/)
0
_I3
TO
>
o
MS-EIII
*
HSD
MS
LPG
MS-extra
premium
LU if)
if)
X
Q LL
if)
X X
if)
Different products
□ 2005-06 □ 2006-07 □ 2007-08

Fig. 6.29

Table:6.22 Parameters of different refineries of Indian Oil Corporation, 2006-07
Production capacity Distilled yield Fuel loss Profit
Refineries
(MMTPA)* (In percentage) (MMTPA)* (In Rs. lakhs)
Guwahati 0.839 16 14.5 112.2
Barauni 5.469 16 10.3 81.72
Gujarat 12.953 14 7.6 2117.39
Haldia 5.836 12 9.2 193.01
Mathura 8.883 14 8.8 1437.24
Digboi 0.586 14 12.4 862.82
Panipat 9.435 14 13.0 -135.92
Total 44.001 100 4667.46
Source: Haldia Refinery -IOC, 2009 * MMTPA- Million Metric Tonne Per Annum
Production capacity and fuel loss in different refineries of Indian

Oil Corporation,2006-07
16
Gujarat
Haldia
Panipat
Digboi
Mathura
Barauni
Guwahati
Refineries
ESI Production capacity ■ Fuel loss
Source: Haldia Refinery -IOC, 2009 (Table- 6.22)

Fig. 6.30
Distilled yield of petroleum in different refineries of Indian Oil

Corporation^ percentage), 2006-07
Panipat Guwahati
14% 16%
£*♦♦♦♦♦♦♦♦♦♦♦<
►♦♦♦♦♦♦«
Digboi
14% Barauni
16%
Mathura
14% Gujarat
Haldia 14%
12%

Fig. 6.31

Profit in different refineries of
Indian Oil Corporation(2006-07)
M M
oo ooo oioo
Profit in Rs. lakh
oo o uioo ooo 01
-* J
Gujarat
Mathura
Panipat
Guwahati
Haldia
Barauni
Digboi
cn
,
Refineries
Profit

Fig. 6.32
Causes oflow profitability ofHaldia refinery:
i) Crude oil, the core raw materials has its deep impact on total profitability of the
refinery. With the increase in the international crude oil prices refineries face loss. As
discussed earlier the total crude oil of Haldia refinery is imported from Middle East countries
and Nigerian countries. In which Middle east countries play a very important role as price
decider.
ii) Demand is another important factor, which is applied in all fields of commerce.
Here Haldia refinery is facing losses due to increase in demand of petroleum and gas
products. World's population is expanding at an alarming rate and scarcity of raw material is
rising. As a result, every country is demanding for more and more crude oil, where supply is
limited. Only few oil producing countries are sound in crude production. Because of this
reason demand is increasing, but raw material is scarce and if available they are very
expensive.
iii) Inventory is very important part of any organization. But every inventory has it's
own its use. The inventory holding period of Haldia refinery is 21 days which result in
increase in total cost. Because of no direct supply arrangement, the refinery has to keep a
minimum time period between re-delivery of'crude'.
iv) The distilled yield of petroleum in Haldia refinery is 12 percent which is lowest
among all other refineries of Indian Oil Corporation Limited. Thus it ultimately affects on
the profitability. The Haldia refinery of Indian Oil Corporation is using high as

well as low sulphur crude for production purposes, but there is difference between the
both. Haldia refinery is using ‘high sulphur crude’ in more quantity due to low price but
the distilled yield is low as compared to ‘low sulphur crude’. The other and the key
reason for the use of ‘high sulphur crude’ is the plant design. The plant is primarily
designed to process high sulphur crude, but from last few years, some development work
have been done to process low sulphur crude as well. Equally the fiiel loss percentage is
also comparatively high in Haldia refinery.
v) The high sulphur crude is imported from the Gulf countries. The oil exporting
countries increases the price according to their need. War is another common problem for
Gulf countries. It not only creates irregular supply but also increase the price. Another
reason is ‘American control’ over many Gulf countries like Iran.
vi) Transportation cost is very high in Haldia refinery. Although being situated at
the river side, the shallow river dose not facilitates the entry of Very Large Crude Carrier
(VLCC). Therefore the crude is transferred to Haldia refinery by using small vessels.
These vessels are comparatively small and as a result per unit cost goes up. There is
another reason responsible for high transport cost is the absence of direct pipelines for
crude transportation.
Measures can be taken to Inmase. ikeprofitability:
There are 11 major ports including Bombay, Madras, Kolkata and its outer port Haldia
and about 140 minor ports along India’s 6000 kilometres long coast line. Haldia is located
on the right bank of the Hugh River. Development of Haldia port as an outer port for
Kolkata started during 1960’s. Geographical constrains of the Kolkata Port complex lead
to strengthening of its role as a substitute port, and cargo volume is increasing every year.
But the port is not properly maintained with the increasing demand. Structure of the
existing oil jetty is unstable due to river bed erosion, and some jetty is damaged already.
Moreover the port could not meet demand for the transport of crude oil and petrol, oil and
lubricants because of shortage of oil handling facilities. Container handling capacity was
also insufficient thus, it is clear that Haldia port would not meet the expected increases in
cargo handling demand.
The objectives were to increase the cargo handling capacity and improve operational
efficiency at Haldia port, West Bengal, which is the main port at the mouth of the river

Ganges, by developing an oil jetty and other facilities, and there by contributing to
economic growth in the region. With the development of the port comparatively big
vessels can also enter into it. Direct pipelines from the main port to Haldia refinery can
reduce the cost of transportation. The crude comes from two ports, during April to
September—from Kakinada port, and during October to March—from Paradeep port.
Haldia refinery earns highest by selling superior kerosene oil, liquefied petroleum gas,
high speed diesel and motor spirit. But these four products are under control of state
government which means the prices of these products are decided by the government. The
price decided by the government is much lower than refineries’ cost of production. This is
in turn causes low profitability of refinery. For this loss, government issues bonds which
may be of the period of 15-20 years but these bonds are helpful for the short term finance.
Similarly government at present is providing only l/3ld of total loss amount. If they
increase it by 17 percent (all total 50 percent) the burden will be diminish.
Table:6.23 Product cost at different levels of Haldia refinery (2007-08)
Serial Products Actual Transfer cost Net realizable

no. cost value
In Rs. lakh
1. Liquefied petroleum gas 34534.38 35522.62 24175.26
2, Motor spirit BAIF 26855.6 29344.07 23732.18
3. Motor spirit extra 28184.63 29582.87 21924.13
premium
4. Motor spirit Euro III 29407.01 29707.75 22442.99
5. Superior kerosene oil 28390.18 28353.57 12877.98
6. High speed diesel 31721.94 34021.37 23628.14
7. High speed diesel Euro 31977.37 34181.95 22796.56

III
8. Aviation turbine fuel 29724.56 30910.51 39076.64
9. Naphtha 33225.12 36280.00 3604.23
10. Bitumen 80/100 bulk 19262.12 20500.00 24018.0
11. Jute batching oil(p) 38442.97 41961.55 43240,0
12. Jute batching oil-C 39494.39 42286.55 43240.0
13. Carbon black feed stock 20716.85 22745.0 23100.0
14. Micro crystalline wax 69771.76 70202.97 73860.0


Cost of products at different level in
Haldia refinery (2007-08)
Rs. lakh
in
Values
|
|
III)
III)
MCW
MS(extra premeum)
JBO©
CBFS
HSD
MS(BAIF)
JBO(p)
LPG
ATF
Naphtha
SKO
Bitumen
HSDfEuro
MS(Euro
Products
CUD Actual cost cm Transfer price —*— Net realizable value
Source: Haldia Refinery -IOC, 2009 (Table- 6,23)

Fig. 6.33
This fluctuation occurs due to the stock valuation processes at the end of the financial year
because this is based on the 'weighted average cost or net realizable value
(NRV).Therefore if the rate of crude during purchase is low and then if at the time of
despatch the crude price hikes up, the refinery will be at profit and vice versa. As for
example, suppose the price of raw crude is 89.25 dollar per barrel at the time of purchase
or import. At present the rate of raw crude per barrel is 97.76 dollar. The final rate of the
finished products will be calculated according to the present price. And because of rising
trend of international crude prices, the company cannot incur loss.
The demand of crude oil is raising sharply due to high growth and demand from the
emerging economy on the supply side. The major sources of supplies are still the same as
they were in the last decade. This is another factor that is influencing the prices of crude oil
upwards. Crude oil inventories have demonstrated a highly cyclical pattern in the recent
past. Usually crude oil inventories increase in the summer months and decrease in the
winter month. This is because cold temperature in the winter increases the use of energy
for heating in many cold countries. Likewise, during warm summer months, supply
generally exceeds demand. Hence, the crude oil prices drop. Crude inventory provide a
good signal towards the price direction. India imports more than 80 percent of

erode requirements from oil producing countries and therefore fluctuations in oil prices
are being traced more closely in the domestic market.
Prices of essential commodities like crude are also one of the prime drivers of inflation in
the global economy. Haldia refinery is the only producer of lube among all refineries. It is
the highest supplier of crude product. The demand of the product is quite high which give
a positive impact to Haldia refinery. From the last few years the demand is decreasing
because of the reason of open economy. By this time Haldia refinery was producing Euro
II lube. But due to high competition and entry of Euro III lube, the refinery also started
upgrading its product’s quality.
In the year 2010, the company started producing Euro IV lube. The supply is divided into
two parts, Euro III for rural areas and Euro IV for urban people. West Bengal, Orissa,
Jharkhand and Chattisgarh are the four states who are depending upon the Haldia refinery
for supply of petroleum products.
The pipelines from Paradeep refinery help a lot in transportation of crude oil from Haldia
refinery directly. It will facilitate transportation of crude oil to Haldia in an efficient and
cost effective manner compared to the present situation.
To produce environment-friendly Euro III motor spirit, Haldia refinery has commissioned
motor spirit quality improvement unit. ‘Once through Hydro Cracker’ project has set up
at Haldia refinery. This unit is reducing generation of heavy end products, improving
distillate yield and producing environment-friendly, high quality diesel, which have extra
low sulphur, thus improving engine performance and lowering emission level.
Problems faced during operation: Crude oil is generally classified as sweet crude and sour
crude. Sweet crude like Assam and Ankleswar crude have low salt contain but imported
crude contain high salt. Salts are mainly sodium, calcium and magnesium chloride. In
general, sodium salts are stable but calcium and magnesium chlorides which are present
in crude approximately 15 percent and 3 percent respectively by weight dissociate and
form hydrochloric acid (HCL). Hydrochloric acid attacks at the top of the unit because in
column overhead the low temperature moisture available from steam is condensed and the
corrosive hydrochloric acid attacks the column-head in presence of water and moisture.
To ensure treatment of liquid effluents before discharging it into the outside water body,
the Effluent Treatment Plant (ETP) was set up and commissioned at refinery prior to the

refinery went into operation. The same Environment Treatment Plant was augmented in
the year 1988 meet Minimal National Standards (Minas) specified by the Ministry of
Environment and Forest, Government of India. In the task to reduce the effluent discharge
from the refinery, a scheme for re-use of the same has also been implemented.
Environmental Impact Assessment studies are done before commencement of any project
by external agency so that there is no adverse impact of that project on environment. The
Environment Treatment Plant was modernized in the year 2003 to cater the increased load
of effluent water generation from the refinery. To monitor the ambient air quality, five
monitoring stations have been established. Keeping in view the importance of
environment conservation, a massive tree plantation in and around the refinery has been
taken up and more than 32,799 trees have been planted for the development of green belt.
To further protect the environment, Diesel Hydro- Desulphurization Unit along with two
additional sulphur recovery plants of 60 tonnes per day capacity each, have been
installed.
Fire fighting facilities: Elaborate and modem fire fighting facilities have provided by the
Haldia refinery for fighting two major fires simultaneously. The entire system is in
conformance to the Oil Industry Safety Directorate (OISD) standard. The major facilities
include:-
• Fire water storage and fire water pumps

(both electric and hundred percent standbys).
• 241 fixed water monitors.
• 19 long range foam monitors.

• Foam pourer system in storage tanks.
• Water spray or certain system in critical areas.
• Hydrocarbon leak detection and warning system etc.
Table:6.24 List of significant risks identified in Haldia refinery plant area
Serial Significant risks Effect

no.
1. Initial lighting of burners of the furnaces Back fire resulting personal
CDU-1, VDU-1 and FEU units. injury, equipment damage and
production loss.
7 Heat exposure at CDU-1 burner floor level. Burn injur}-' due to body contact
with high temperature furnace
shell.
3. Hydrocarbon leak from pumps- de-etheniser Personal injury, fire hazard,

pumps (FOB), propane pump, solvent pump at equipment damage.
Lube Oil Block, LPG pumps at LPG pump
house.
4. Hydrocarbon leak from hot pumps both at Personal injury, fire hazard and
Fuel Oil Block and Lube Oil Block. equipment damage.
5. Draining from high point level gauge for Oil spillage, personal injury,
instrument check up hydrocarbon exposure and fire
hazard.
6. Draining from equipment at different units. H2s exposure and health hazard.
7. Safely release to atmosphere due to mal- Fire hazard, personal injury,
operation or failure of control system equipment damage etc.
8. H2s exposure during draining kerosene oil of Health hazard.
Atmospheric Distillation Unit at Fuel Oil
Block.
9. The VS stripping steam line block valve Personal injury due to fall from
operation at Vacuum Distillation Unit. height.
10. Ruptures in pumps Fire hazard, personal injury,
equipment damage etc.
11. Hot condensate draining locally at pump Personal injury.
house.
12. Oil draining from heat exchanger. Toxic exposure resulting health
hazard.
13. H2s release during draining, leak etc. from Toxic exposure resulting health
equipment at Fluid Catalytic Cracking Unit. hazard.
14. Unloading of ammonia from ammonia bulk Toxic exposure resulting health
truck. hazard.
15. Water draining from liquefied petroleum gas Fire hazard, property loss, and
storage. production loss.
16. Leakage in storage tanks. Personal injury, fire hazard.
17. Fall from height of refinery during,repair, Health hazard due to fall from
maintenance and project jobs. height
18. Stacking of material at main warehouse. Personal injuries due to
materials fall on body.
19. Maintenance in Vacuum Distillation Unit. Personal injury due to fall from
height.
20. Draining of Level Gauge Glass, Flow Personal injury due to sudden
Transmitter tap etc. release of hydrocarbon or toxic
gas.
21. Non compliance of PPE used by contractor Personal injury.
workmen
22. Biological waste management at reference Health hazard.
hospital.
23. House keeping and open drains at canteen Health hazard.
premises.
24. Vegetable and food storage. Health hazard.
25. Drinking water quality. Health hazard. •
26. LPG leak at LPG gas cylinder connection Fire hazard, personal injury.
header at canteen.
27. LPG loading rupture or heavy damage. Fire hazard, equipment damage,
production loss, personal injury.
28. Fuel oil leak at plant area. Fire hazard, equipment damage,
production loss, personnel
injury.
29. Fuel gas leak at plant area. Fire hazard, equipment damage,

injury.
30. Naphtha sludge drum failure Fire hazard, equipment damage,
injury.
31. Stabilizer reflux drums failure. Fire hazard, equipment damage,
injury.
32. Inlet line to amine absorber failure. Fire hazard, equipment damage,
injury.
33. Leakage from main combustion chamber Fire hazard, equipment damage,
injury'.
34. H2S transfer line leak. Fire hazard, equipment damage,
injury.
Serial number- 28, 29, 30, 31,32, 33, 34* Risk reduction measures which are under implementation
Source: IOC, Haldia Refinery, Fire and Safety Department, 2009
Waste disposal: The principal wastes generated at the refinery are the residual oily
sludge after the treatment of raw oily sludge from crude tank bottom and Environment
Treatment Plant. The treated oily sludge is stored in pits at the separate area earmarked to
be disposed off through bio-remediation or incineration. The other waste is fuel gas
emitted from process heaters or boilers which is discharged to atmosphere through tall
stacks. This gaseous waste fully complies with the environmental stipulations.
Socio-economic impact: In and around Kolkata Port some industries were constructed in
West Bengal. But after high rate of siltation in Kolkata port, the port trust of India
together with Government of West Bengal developed the secondary port at Haldia. They
approached to Indian Oil Corporation to develop a refinery in Haldia.
The Haldia refinery is a deep sea port. The impairment was done by the local people. It
has a beneficial impact on the people of Haldia. Large number of direct employment has
been done with a lot of indirect employment. Refinery owners were constructed large
hotels for officers and guests. Small restaurants have been developed automatically by the
local people for drivers and contractors. As a result every 15 minutes bus services were
started from Mecheda. Roads and flyovers were constructed for better transportation.
Howrah to Haldia train services have been started for easy access to Haldia.

At present 700 workers are working inside the refinery. They are employed through out
the year in painting, in transport, in house keeping, gardening, repair and maintenance, in
office lighting etc. Apart from this the company has done some project work. Here the
people are employed by the contractor as project men. Almost 4000 people were working
in the hydro cracking project. The project now completed and started production from
25th December 2010.The Haldia refinery gave impetus to other industries to come to
Haldia and establish their factory like Mitshubisi, Haldia Petrochemicals Limited, Tata
Chemicals, Exides etc.
They provide practical training to the students of technical institute like IIT Delhi,
Kharagpur, Techno India etc. The number of student is around 150 every year. The
Haldia refinery provides apprentice trainee in various trades through the office of
Regional Apprentice Advisor, Kolkata. At this they select certain number of trainee and
give them training for certain duration. They teach them practical work so that the trainee
can work in different companies successfully. It helps to improve the quality of life of the
community it serves. Community Development Programme of Haldia refinery is a step
towards fulfillment of social responsibility in the areas of education, health care, sports,
ecology and quality of life. As a part of educational assistance, Personal Computers
where provided to Haldia Institute of Technology and also to near by colleges for
imparting computer education to the students. Construction of classrooms and hostels for
students, procurement of books and furniture to neighboring schools and social welfare
are the integral parts of the social welfare mission of the refinery.
References:
■ Collection of data from the departments like Personal, Finance, Manufacture, Lobour,
Fire and Safety etc., Haldia refinery- Indian Oil Corporation, Haldia, 2009.
* Field survey, (2009), Haldia refinery- Indian Oil Corporation, Haldia, West Bengal,
■ Haldia refinery- Indian Oil Corporation, (2005-06 and 2006-07), Annual report.
* * * *

Chapter-VI
CASE STUDY- III
HALDIA PETROCHEMICALS LIMITED, HALDIA
With the rapid development of technology in petroleum distillates, the petro-chemical

industry has emerged as a main supplier of basic chemicals that were once derived from
coal, alcohol and vegetable oils. Besides, a large number of new chemicals are produced
on a commercial scale. In India as well as in West Bengal the petro-chemical industry is
of recent growth. The industry has yet to move a long way to prosperity. The important
raw materials needed for the petro-chemical industry are natural-gas, refinery gas and
naphtha.
Oil is the prime requirement of petrochemical industry. Haldia is farther away from oil
producing region and also from the market. But the port facility with good coastal
location can import raw material and technical equipment. In colonial period, chemical
industry was situated in Hugh industrial belt. Now Gujarat comes first. Future possibility
of petrochemical is restricted in eastern and western part of the country.
Haldia Petrochemicals Limited (HPL) is the largest petrochemical plant in eastern India.
Though it is commissioned in the year 2000, the commercial production of this company
started in August 2001. The Chatteijee group and Associates and West Bengal Industrial
Development Corporation (WBIDC) are the two major shareholders of Haldia
Petrochemicals Limited. Incorporated as a Public Limited Entity in 1985, Haldia
Petrochemicals Limited got the Environment Clearance certificate in 1992.
Infrastructural facilities: The riverine port has been set up by Kolkata Port Trust and is
operated by Haldia Dock Authority. It is situated on the river Hugli. Three jetties are
there for handling oil and crude and 12 jetties for loading and unloading containers and
solids. Haldia Petrochemicals Limited imports their entire requirement of feedstock
naphtha through this port. Similarly, almost all the industries located at Haldia use this
port to export their products. Indian Oil Corporation is currently setting up a crude
pipeline from Paradeep Port at Orissa to Haldia. It helps all the industries in Haldia to get
132
Chapter-VI Haldia Petrochemicals Limited, Haldia
feed stocks easily. In 1994, Government of West Bengal commissioned the Geonkhali
water supply facilities to supply filtered water to industrial town of Haldia. The water of
Hugh and Haldi River at Haldia is saline due to close proximity to Bay of Bengal. The river
water of Geonkhali is situated 40 kilometres upstream of river Hugh, thereby being
suitable for industrial use. It supplies water through an 1100-millimetres diametre pipeline
from Geokhali to Haldia. Haldia is well connected with telephone facilities.
Satellite Imagery of Haldia Petrochemicals Limited,

Haldia, West Bengal
Source: Google Earth view, 2011.
Fig.: 6.34
Chapter-VI Haldia Petrochemicals Limited, Haldia 133

Many private mobile operators have set up their own towers at Haldia. Haldia
Petrochemicals Limited have set up their V-SAT communication facilities for mail, data
and drawing transmissions to contractors, customers, vendors, collaborators and to outside
agencies in general. Acanal, popularly called 'Green Belt Canal' was constructed during the
development of Haldia Port Township. Through this canal all the industrial effluents are
discharged. Power supply for the entire Haldia area is met by 132-kilometres transmission
line from Kolaghat Thermal Power Station of West Bengal Power Development
Corporation Limited (WBPDCL). This line was laid to ensure continuous power supply.
Combined Cycle Cogeneration Power Plant (CCCPP) meets the power and steam
requirements of petrochemical complex under continuous, start-up and emergency cases.
This plant is a joint venture of Haldia Petrochemicals Limited and Larsen and Toubro and is
built on Build Own Operate basis. The plant has designed capacity of 116-mega watt of
electric power while the current normal requirement of the petrochemical complex is
around 67-mega watt. Naphtha, fuel gas and high-speed diesel are used as fuels in this
Combined Cycle Cogeneration Power Plant.
Table: 6.25 Power and steam output capacity of HPL power plant, 2008
Power Capacity Requirement Surplus capacity
output 116mw 67m w 49mw
Steam output 480tph 332tph 148tph
Source: HPL. 2009 Mw-Mega watt Tph-Tonnes per hour
Power and steam output capacity of HPL power plant, 2008
600
500
tonnes per hour
steam output in
400
300
200
•DO
Capacity Surplus capacity

Different variables
Power output Steam output
Source: HPL, 2009 (Table-6.25)

Fig. 6.35

The captive power plant ensured that the steam and power supply to the complex are not
affected for any of the upset conditions.
Raw materials and product movement from Haldia Petrochemicals Limited: Haldia
Petrochemicals Limited is engaged in manufacturing of polymer products by thermal
cracking of naphtha and polymerizing the intermediate products like ethylene and
propylene. Various associated products like mixed Butane, Butadiene, Cyclo-Pentane,
C6-raffinate, CBFS, Pyrolysis gasoline etc. are also produced during the process, which
need to be transported to various consumers. The major raw materials required for
manufacturing processes are Naphtha, Butane-1, Liquefied Petroleum Gas, High Speed
Diesel, Hexane, Fuel Grade Naphtha, various chemicals like NMP, DMDS, TEAL,
donors and stabilizers. The main products that are transported outside Haldia
Petrochemicals Limited are Polymer products (High density polyethylene, Linear low
density polyethylene, and Polypropylene), Mixed Butane, Butadiene, Benzene, Cyclo-
Pentane, Pyrolysis Gasoline, C6- Raffinate, CBFS. Besides this, sometimes,
intermediate products like propylene is also unloaded to enhance the capacity of
Polypropylene production.
Description of raw materials:
Naphtha'. It is the main raw material (annual requirement is 1.6 million metric tonnes)
required for the polymer manufacturing operation. It is mainly procured from Thailand,
Malaysia, and Middle East countries. The domestic suppliers are Oil and Natural Gas
Commission and Indian Oil Corporation. Naphtha from Indian Oil Corporation is
received through pipeline from the storage tanks Haldia refinery of Indian Oil
Corporation. All other supplies are received though ship tankers, which are unloaded at
jetty and pumped to Haldia Petrochemicals Limited storage tanks through pipeline. It is
about 6.5 kilometres long and running under the surface. Average use of the line is 15
days per month.
Butane-1: It is used in Linear Low Density Polyethylene plant. Butane-I is mainly

imported from outside through ship tankers and unloaded at river jetty. The material is
transferred to Haldia Petrochemicals Limited storage spheres through pipeline. About
135
12000-15000 metric tonnes of Butane-1 is required in the plant per year. Average use of
the line is 8 days per month.
Liquefied Petroleum Gas: It is initially required during the start-up of Naphtha Cracker
Unit as fuel. A storage sphere, pipeline and pumps have been provided to meet the
requirements. Once the start-up is over, sufficient Mixed Butane is produced during the
manufacturing process to meet the requirement. Excess mixed butane can also be cracked
with Naphtha in Naphtha Cracker Unit for producing Ethylene and Propylene.
High-speed diesel: It is mainly used as wash-oil in Naphtha Cracker Unit and start-up
fuel in captive power plant. It is received in tankers and unloaded to storage tanks by
unloading pump. The annual requirement is very low.
Hexane: It is received in containers and unloaded at storage tank. Annual Hexane

requirement is about 3000-3500 metric tonnes.
Fuel Grade Naphtha: It is used as a fuel in captive power plant. It is received in tankers
and unloaded to storage tanks by unloading pump. Pipeline has been provided to unload
and transfer fuel grade Naphtha. The annual requirement is about 120000-150000 metric
tonnes.
Catalyst and chemicals: These are required during various stages of manufacturing
process. They are generally solid and liquid in nature and procured from national and
international markets. The material is received through ship cargos or trucks or tankers.
Major chemicals are TEAL, DMDS, NMP, Sulfuric Acid, Caustic, donors, stabilizers etc.
used in Naphtha Cracker Unit, Associated Unit, Integrated Offsite Plant, High Density
Polyethylene, Linear Low Density Polyethylene and Polypropylene.
Polymer Bagging Section: There are three bagging plants, one each for Polypropylene,
Linear Low Density Polyethylene and High Density Polyethylene. Each bagging plant has
four bagging machines where the polymers are filled in 25 kilogram bags. The filled bags
are then stacked in the respective products warehouses to despatch to the customers.
136
Chapter- VI Haldia Petrochemicals Limited, Haldia
Plate 5
Haldia Petrochemicals Limited complex
Plate 6
Haldia Petrochemicals Limited import and export products through pipelines
Source: Haldia Petrochemicals Limited, Annual report, 2003-04.

The products produced by Haldia Petrochemicals Limited:
Polymer products: Polymer products like High Density Polyethylene, Linear Low
Density Polyethylene and Polypropylene are primarily sold to domestic market by trucks
and containers. A part of the material is exported to various neighbouring countries by
ship. The material is loaded in trucks or containers manually.
Mixed Butane: It is produced in C4 Hydrogenation Unit and is one of the main co
products produced from Haldia.Petrochemicals Limited. It is used mainly by Liquefied
Petroleum Gas suppliers for blending with C3 Liquefied Petroleum Gas and sells it as
Liquefied Petroleum Gas to domestic consumers. The material is loaded to tankers by an
automatic loading system. Vapour return circuit has been provided to prevent emissions
to atmosphere. The average parcel size of each tanker is 17-18metric tonnes.
Butadiene: It is produced in Butadiene Extraction Unit and is one of the main co
products produced from Haldia Petrochemicals Limited. It is primarily exported to
various countries by ship tankers. A dedicated pipeline has been provided from storage
spheres to jetty for loading purpose. A part of the Butadiene is also sold in domestic
market by loading it into insulated tankers.
Benzene: It is produced in Benzene Extraction Unit and a co-product produced from

Haldia Petrochemicals Limited. It is primarily sold to national and international market
by ship tankers or road tankers. The products are shifted from storage tank to jetty for
loading into the ship tankers through pipeline. Vapour extraction unit has been provided
to collect Benzene vapours which are emitted during loading. The vapour then converted
into liquid Benzene.
Cyclo-Pentane: It is produced in Pyrolysis Gasoline Hydrogenation Unit and transported

to national or international consumers by ship tankers. The material is loaded into
containers which are again loaded into ship. Necessary pipelines have been provided
within the complex to load materials from storage tank to containers.
138
Chapter-Vl Haldia Petrochemicals Limited, Haldia
Pyrolysis Gasoline: It is produced from Pyrolysis Gasoline Hydrogenation Unit plant and
is sent to Indian Oil Corporation through pipeline to blend it for making Motor Spirit
(MS) and other refineries in the country through road tankers.
CV Raffinate: It is used as a raw material for Motor Spirit. Loading gantry and necessary
pipelines have been provided within complex to load material from storage tank to
tankers.
CBFS: It is a semi-solid material and is sold to domestic market. Loading gantry and
necessary pipelines have been provided within complex to load materials from storage
tank to tankers.
Propylene: It is an important raw material for Polypropylene plant and is received in

tankers for Naphtha Cracker Unit. The material is unloaded in propylene unloading
gantry and transferred to storage spheres through pipelines.
Nitrogen plant: The nitrogen plant has been set up to meet nitrogen demand of Haldia
Petrochemicals Limited. The plant comprises air separation unit, liquid nitrogen storage,
liquid nitrogen plant, and liquid nitrogen vapour. These units can produce liquid and
gaseous nitrogen. Only gaseous nitrogen is despatched to the process units.
Haldia Petrochemicals Limited currently consumes 1.7 million tonnes of Paraffinic

Naphtha per annum (about 140,000 tonnes per month) as petrochemical feed stock to
produce Ethylene, Propylene and other chemicals. In addition the complex also consumes
about 200,000 tonnes of fuel grade Naphtha per annum for the power plant. Since
commissioning in 1999 Haldia Petrochemicals Limited has come a long way in evolving
its Naphtha sourcing strategy. HPL increases the domestic source of Naphtha from
Chennai, Mangalore refinery and Bharat Petrochemicals Limited, Kochi. In addition
Haldia Petrochemicals Limited also imports Naphtha from international suppliers. The
import of Naphtha is about 110000 tonnes per month (110 kilo tonnes per month). Out of
110 kilo tonnes per month of total imports, about 60 kilo tonnes per month are on annual
term basis from Kuwait Petroleum Corporation. Another 50 kilo tonnes per month is
purchased on spot basis from reputed international vendors. Fuel grade Naphtha is
139
purchased from Haldia refinery of Indian Oil Corporation and Numaligarh refinery of
Bharat Petrochemicals Limited. The Naphtha purchase price of Haldia refinery is bench
marked against international Naphtha market known as Mean of Platts Arab Gult
(MOPAG) price for both domestic and international procurement. Haldia Petrochemicals
Limited is currently consuming only 30-kilo tonnes petrochemical Naphtha per month
from Haldia refinery. This clearly indicates that Haldia Petrochemicals Limited has the
option of meeting their additional volume requirement of 50 kilo tonnes per month from
domestic sources. Imported Naphtha availability is also abundant. Kuwait Petroleum
Corporation is keen to increase their supply volume with Haldia Petrochemicals Limited.
Other Middle East refineries such as ADNOC, Saudi Aramco have also shown active
interest to enter into term contracts with Haldia Petrochemicals Limited.
Table:6.26 Demand and supply of Naphtha in India, 2003-04 to 2008-09

In thousand tonnes
Year
Naphtha demand Naphtha supply
2003-04 12000 12500
2004-05 12500 12800
2005-06 12500 13000
2006-07 10500 14000
2007-08 10500 15000
2008-09 12000 15000
Source: HPL, 2009
Demand and supply of Naphtha in India,

2003-04 to 2008-09
13000 15500
o 12500 15000
o
o 14500 o
12000 o
C «o
14000 o
T3 ® 11500 13500 c
w<D
■“ C
|2-11000 13000 >> c
Q. O
g 10500 12500
12000 w
10000 11500
9500 11000
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
Year
Naphtha demand Naphtha supply
Source: HPL, 2009 (Table- 6.26)

Fig. 6.36
Chapter- VI Haldia Petrochemicals Limited, Haldia 140

Plant description: Haldia Petrochemicals Limited is a naphtha cracker based production
plants. It consists of units for production of Polypropylene (PP) Polyethylene (high
density and low density) Benzene, Butadiene and other petrochemicals. The product flow
chart is given below.
Table:6.27 Haldia Petrochemicals Limited - its units and capacities
SI no. Capacity
Unit (kilo tonnes per annum) Licensor
Original Current ABB Lummus,

1. Naphtha Cracker 420 520 New Jersey, USA
Associated Unit
2.1
Hydrogenated pyrolysis 105 130 Axens, France
gasoline
2.2
Butadiene 75 75 Lummus, USA
2.3 Benzene 77 98 Lurgi, Germany
2.4 C4 hydrogenation unit 84 84 Axens, France
2.5 Motor Spirit - 136 -
Polymer Unit
3. High density 200
260 Mitsi chemicals,
polyethylene Japan
4. Linear low density 225 274 Germany
polyethylene
5. Polypropylene 210
255 Brassel, Italy
Off-site Unit
6 . Integrated Offsite plant - - -
7. Nitrogen plant 9000 metre cube
per hour
8 . Captive power plant 116.4 mega watt - -
Source: HPL, 2009
Naphtha Cracker Unit (NCU): The Naphtha Cracker Unit is the mother unit of Haldia
Petrochemicals Limited complex. It produces polymer grade Ethylene, Propylene and
other liquid chemicals by thermal cracking of Naphtha, recycle stream like C5 Liquefied
Petroleum Gas, Ethane and Propane. Ethylene, Propylene and liquid chemicals are further
processed in down stream Polymer unit and Associated units to produce polymers and
value added chemicals. The plant was originally designed by ABB lummus Global-INC,
141
USA to produce 42 kilo tonnes per annum of polymer grade Ethylene and 210 kilo tonnes
per annum of polymer grade Propylene in 8000 hours per year.
Associated Units:
Pyrolysis Gasoline Hydrogenation unit: The Pyrolysis Gasoline Hydrogenation Unit has
been designed to hydrogenate the raw Pyrolysis Gasoline stream coming out of the
Naphtha Cracker Unit. The plant has been designed for 290 kilo tonnes per annum flow
of raw Pyrolysis Gasoline. The raw Pyrolysis Gasoline obtained from cracker contains
Diolefins, Olefins, Paraffins and Aromatics.
Butadiene Extraction Unit: This plant is designed to extract 99.5 percent pure Butadiene.
The capacity of this plant is 75 kilo tonnes per annum Butadiene.
Benzene Extraction Unit: The Benzene Extraction Unit has been designed to extract
Benzene coming from the Pyrolysis Gasoline Hydrogenation Unit. It is based on the
principle of extraction of Methyl Pyrolidone as solvent. The capacity of the unit is 77050
tonnes per annum.
Q Hydrogenation Unit: The C4 Hydrogenation Unit has been designed to hydrogenate

the C4 mix coming out of Naphtha Cracker Unit and C4 raffinate coming out of Butadiene
Extraction Unit. The capacity of the unit is 112.6 kilo tonnes per annum.
High Density Polyethylene Plant (HDPE): This plant was designed to produce 200-kilo
tonnes per annum of entire range of High Density Polyethylene. Now it is processing
240-kilo tonnes per annum.
Linear Low Density Polyethylene Plant (LLDPE): This Linear Low Density
Polyethylene plant essentially consists of two sections viz. the polymerization section and
the monomer purification section.
Polypropylene Plant: The plant is designed to produce 210000 tonnes per year of various
142
Chapter-Vl Haldia Petrochemicals Limited, Haidia
grades of Homopolymer, Co-polymer, Random co-polymer and Terpolymer grades of
Polypropylene.
Integrated Offsite Plant(IOP): In order to meet the utility requirements of the process units,
necessary utility facilities like raw water system, plant water system, cooling water system,
fire water system , de-mineralized water system, fuel gas and diesel system, compressed air
system, have been provided. Storage and other associated facilities for the feedstock
required by the process units and for the intermediate and final products are obtained from
these units.
Table: 6.28 Production of different units of Haldia Petrochemicals Limited,

2002-03 and 2003-04
Production(metric tonnes)
Plant
2002-03 2003-04
Naphtha cracker unit (NCU) 572167 766022
Linear low density polyethylene (LLDPE) 182771 270367
High density polyethylene(HDPE) 202238 237034
Polypropylene(PP) 192416 254502
Source: HPL, 2009
Production of different units of Haldia Petrochemicals

Limited, 2002-03 and 2003-04
1400000
1200000
Production in
metric tonnes
1000000
800000
600000
400000
200000
0
HDPE
Production units
□ 2002-03 ■ 2003-04

" Fig.6.37
Domestic market: The entire east coast of India, the southern region, east Uttar Pradesh
and east Madhya Pradesh etc. are the primary market for Haldia Petrochemicals Limited.
Apart from the eastern and southern region, the company has captured the large
Chapter-VJ Haldia Petrochemicals Limited, Haldia 143

traditional polymer markets of western and northern India. The marketing organization of
Haldia Petrochemicals Limited is focused on Polyolifins. Through its marketing
strategies, Haldia Petrochemicals Limited has been able to maintain an overall market
presence with 23 percent market share of High Density Polyethylene and 26 percent
Linear Low Density Polyethylene and 19 percent Polypropylene. The all India market
share of Haldia Petrochemicals Limited in 2005-06 was 25 percent and at 71 percent
respectively in eastern India.
At present, only 10 percent of India’s raw polymer products are used in eastern India. Per
capita consumption of plastics in West Bengal is 2.85 kilo gram as against all India per
capita consumption of 3.5 kilo gram. This gap represents a significant opportunity for
Haldia Petrochemicals Limited, as the availability and supply are expected to stimulate
the local down stream petrochemical conversion industry. Haldia Petrochemicals Limited
enjoys a competitive advantage in marketing and establishing itself as a most preferred
supplier to end-user industries, not only in the West Bengal and eastern India, but also
through out the country. Haldia Petrochemicals Limited has curved out a market share
position in India with a major focus on import substitution with the help of its unique
geographical position. It is the only petrochemical complex on the east coast of India and
has a good access to the southern markets by the port at Haldia. Haldia Petrochemicals
Limited also enjoys the selling of its products into north and east Indian markets. The low
transportation cost saves 3.5 percent to 4.5 percent sales prices in this region. In addition
the company aims to develop the market further for these materials by enhancing the
product quality and developing the customer service programme.
Haldia Petrochemicals Limited supplies polymer products to the agricultural and food
processing sectors like packaging films, bags, sacks and bottles. In addition, it supplies
products to consumer durables and manufacturer of light industrial materials including
house ware, bottles, and hard-plastic packages. Overall the marketing strategy of the
company is customer oriented rather than product focused approach. Haldia
Petrochemicals Limited is able to capture 68 percent market share in eastern region.
144
The company also enjoys a logistic advantage to export products due to its proximity to
China, Nepal, Bangladesh and other South Asian countries. The exports are thus one of
the most cost-competitive in terms of freight. Haldia Petrochemicals Limited have
expanded its export markets in China. In financial year 2004-05, the company exported
35 percent of manufacturing products to China, 13 percent to South East Asia, 10 percent
to Bangladesh and Nepal, 3 percent to Turkey, 1 percent to Africa and 34 percent to
Europe.
Table: 6.29 Production of chemical products of Haldia Petrochemicals Limited, 2008
Products Production (metric tonnes)
Benzene 98000
Butadiene 75000
Motor spirit 16000
C4 liquefied petroleum gas 84000
Pyrolysis gas 130000
Carbon black feed stock 66000
Cyclopentane 10000
Source: HPL, 2009
All the chemical products of Haldia Petrochemicals Limited have been well accepted in
domestic as well as international market. Haldia Petrochemicals Limited due to their
superior quality and exceptional marketing efforts have been able to secure a consistent
export market for Butadiene, Benzene cyclopentane, Py Gas, Motor Spirit etc and a
continuous increasing domestic sales volume of all the products.
Table:6.30 Chemical sales value of Haldia Petrochemicals Limited, 2001-02 to 2005-06

Year Chemical Year Chemical sales
volume value (Rs. crore)
(kilo tonnes)
2001-02 210 2001-02 330
2002-03 190 2002-03 400
2003-04 320 2003-04 700
2004-05 500 2004-05 1400
2005-06 580 2005-06 1760
Source: HPL, 2009-
145
Production of chemical products of Haldia Petrochemicals
Quantity per metric Limited,2008
ocoooooo
rofckOX»cjxj^.
ooooooo
tonnes
Cyclopentane
Benzene
Butadiene
□ Production capacity

Fig. 6.38
Chemical sales value of Haldia Petrochemicals Limited,

2001-02 to 2005-06
700 ",
CNJ
oo
o
600
sales volume
Sales value in
in kilo tonnes
t
m
oo
Rs. crores
500 -
400
oo
o
300
200
in
oo
100 -
0
200*-02 2002-03 2003-04 2004-05 2005-06
Year
] Chemical volume —Chemical sales value
Source: HPL, 2009 (Table-6.30)

Fig. 6.39
Chemical price movements: Chemical price is influenced by dual market force viz
naphtha market and the particular chemical end use market. This gives the chemical
business the uniqueness of having varied value addition opportunities as well as increased
price risk. Domestic prices are based on import price parity including domestic freight cost.
Due to the proximity to South East Asia and export benefits offered by the government,
both Benzene and Butadiene export of HPL to South East Asia often becomes economically
most justified than domestic supply with high inland freight. Domestic price of liquefied
petroleum gas for use in the industrial and commercial purpose is based on import price
parity. The international liquefied petroleum gas prices exhibit considerable
Seasonal fluctuation. In 2004-05, the price varied between USD 294
Chapter- VI Haldia Petrochemicals Limited, Haldia 146

in April 2004 and USD 473 in November 2004. For carbon black feed stock there is no
fixed price market available, hence the import price parity is based on the actual price.
Product wise details of current and future market:
Benzene: Domestic manufacturers such as FACT, Kochi, have accepted Haldia

Petrochemicals Limited as reliable supplier and consistent high quality Benzene
manufacturers. Other regular domestic consumers of Benzene are Tamilnadu Petro
Products Limited, Thirumalai Chemicals at Chennai, Herdillia Chemicals at Mumbai,
Indian Oil Corporation, Baroda. Because of the location proximity to the Asian markets,
regular availability of inbound vessels (carrying paraxylene for Mitsuibishi Chemicals)
going toward South East Asia (SEA) and consistent product quality, HPL is able to
capture the Asian Benzene market.
Butadiene: Owing to high purity and very low dimmer content Haldia Petrochemicals
Limited’s Butadiene has been well accepted both in domestic and export market. Through
temperature control both while storage as well as during transportation Haldia
Petrochemicals Limited have constantly been able to meet quality norms. It has been well
accepted in production of ABS, SBR, PBR and other synthetic rubber and latexes. In
domestic market apcotex, BASF, Jubilant are regular customers. After commissioning of
Reliance plant domestic Butadiene market is facing a net surplus. Though the sales value
is higher in south-east Asia due to higher due to lower ocean freight compared to North
East Asia, Haldia Petrochemicals Limited would be able to sell total additional volume at
current level of realization in south east Asia.
Table:6.31 Butadiene demand and supply of Haldia Petrochemicals Limited in

North East Asia, 2003-2010
2003 2005 2006 2007 2008 2009 2010
Year (in’000 metric tonnes)
Capacity 300 305 309 400 400 400 400
Production 250 260 270 360 365 365 365
Domestic demand 270 300 320 340 350 380 430

Source: HPL, 2009
147
Table:6.32 Butadiene demand and supply of Haldia Petrochemicals Limited in
South East Asia, 2003-2010
2003 2005 2006 2007 2008 2009 2010

Year
(in’000 metric tonnes)
Capacity 10000 11000 1 1800 11900 11900 11850 11850
Production 9000 9500 9800 10000 10200 10200 10200
Domestic demand 8900 9700 9800 9900 10100 10500 11000
Source: HPL, 2009
Cyclopentane: Cyclopentane is an environment friendly chemical product from Haldia

Petrochemicals Limited, well accepted in the European market. It is used as a blowing
agent to manufacture Poly Urethane Foam (PUF), an insulation material in the refrigeration
industry. Estimated export volume is 15 kilo tonnes per year.
Butadiene demand and supply of Haldia

Petrochemicals Limited in North East Asia, 2003-2010
o 1200
JZ
CD 1000
E
800
§ g
C § 600
C/5
05 400
TO 200
>
0
2003 2005 2006 2007 2008 2009 2010
Year
□ Capasity □ Production □ Domestic demand
Source: HPL, 2009(Table- 6.31)

Fig. 6.40
Butadiene demand and supply of Haldia Petrochemicals Limited

in South East Asia, 2003-2010
40000 -
n_ n n n r
metric tonnes
Values in '000
30000 -
20000 j
10000-^
o'
2003 2005 2006 2007 2008 2009 2010
Year
□ Capasity DProduction □ Domestic demand
Source: HPL, 2009(Table-6.32)

Fig. 6.4t

The product has experienced rapid growth and vibrant export market particularly in
Europe. Besides Europe, the response is steadily increasing in North and South America
and South East Asian market. Domestic market though small at present is showing signs
of substantial growth as the multi- national refrigerator companies are growing in size.
These companies are already aware about Cyclopentane. Haldia Petrochemicals Limited
is actively working in this market.
Liquefied Petroleum Gas: Haldia Petrochemicals Limited produces Butane with

approximately 98 percent purity. This gives the liquefied petroleum gas a better flame
quality. As India is still deficient in LPG supply, no export has been reported. The Indian
market is broadly divided into highly subsidized domestic market where LPG is used as a
fuel and industrial and commercial application in the ratio of 95 percent and 5 percent
respectively. The industrial sector is not subsidized and dominated by a set of parallel
marketers, like SHV, Eif Gas, Caltex, and Petronas etc selling LPG either in bottles to the
commercial sector or bulk setting as an industrial fuel. Haldia Petrochemicals Limited
supplies products through Indian Oil Petronas and Bharat Petrochemicals Limited, on an
import parity price basis in the eastern region.
Another promising area for use of liquefied petroleum gas is auto fuel. Haldia
Petrochemicals Limited had already conducted a market survey to bright potential for this
pollution free and environment friendly auto fuel. The lack of availability of Compressed
Natural Gas in eastern India also indicates the widespread use of LPG as auto fuel in near
future.
Carbon Black Feed Stock: Carbon black feed stock is available from refinery, steel plant
or petrochemical complexes. The product is rich in carbon and is most suitable for use as
a feed for the Carbon black industries. The CBFS content almost negligible amount of
sulphur (3.5 percent). As India is not self sufficient in CBFC production the market is
mainly domestic. HPL basically supply products to some polymer manufacturing sectors
like Phillips Carbon Black, Hi-tech Carbon and Continental Carbon etc. CBFS is well
accepted in the domestic market due to its low sulphur content. The higher production
would be absorbed with minimum effort.
149
Pyrolysis Gasoline: The Pyrolysis Gasoline manufactured by Haldia Petrochemicals
Limited is very rich in the Aromatics (70-75 percent). It is used in blending for Motor
Spirit and manufacture of feed for Toluene, Xylene and Ethyl Benzene extraction. The
material is sold to Public Sector Refineries only, in order to prevent the possible misuse
of gasoline.
The main end use of Pyrolysis Gasoline is for Gasoline blending. With the recent
Supreme Court order the use of Pyrolysis Gasoline is mandatory for the production of
Euro III grade of motor gasoline. Pyrolysis Gasoline is the natural choice of the blenders
due to its very low benzene and sulphur content. The refineries like Indian oil
Corporation Haldia, and Numaligarh are the main buyers at present. Haldia
Petrochemicals Limited too have started blending Pyrolysis Gasoline to produce Euro III
Motor Spirit. Additionally, Haldia Petrochemicals Limited in future expects to get good
volume addition by positioning this aromatic rich Pyrolysis Gasoline as feed stock for
extraction of Toluene, Ethyl Benzene and Xylene.
Motor Spirit: In addition to Pyrolysis Gasoline Haldia Petrochemicals Limited also
produces side streams like C5 mix, Cg raffinate etc (containing mainly C& hydrocarbons
with less than 2 percent Benzene). By blending Pyrolysis Gasoline, C6 raffinate and C3
streams, Haldia Petrochemicals Limited is now successfully producing Euro III Motor
Spirit (MS). In fact Haldia Petrochemicals Limited is not only the sole petrochemicals
company to produce this product in India but also has pioneered. HPL is the first in India
to produce finished Motor Spirit, meeting the Euro III (Euro IV is under development)
standards. Motor Spirit is currently being sold through the oil marketing companies, both
public sector units and those in the private sector units. HPL supply Motor Spirit to the
public sector oil companies in eastern India. Either than Indian Oil Corporation, none of
the refineries have the supply source of motor spirit in eastern region. Thus the product of
Haldia Petrochemicals Limited is the natural choice of all oil marketers.
150
Table: 6.33 Income and expenditure of Haldia Petrochemicals Limited, 2002-03 and 2003-04
Income and expenditure In Rs. million

2002-03 2003-04
Net income
25956 40063
Raw materials and trading goods expenses 15902 23605

Manufacturing and Other Expenses 6743 7752
Staff Expenses 236 274
Source: HPL, 2009
Fire fighting facilities in Haldia Petrochemicals Limited: Fire section of Haldia

Petrochemicals Limited is basically an emergency handling section. Adequate fire
protection facilities have been provided to handle hazardous substances. Water sprinklers,
foam pourer, deluge, clean agents system have been provided which actuate automatically
in case of any fire emergencies. Besides this, fire extinguishers, water monitors and
hydrants have been provided as per OISD guidelines to ensure availability of adequate
facilities to combat fire; fire section is equipped with state-of-the-art facilities for
emergency handling and is responsible for fire fighting and evacuation during real
emergencies. Various facilities have been provided in the plant for fire-fighting purposes.
Fire section is responsible for maintaining all these equipment in good condition, so that
they are easily identifiable and can be used during emergencies. It involves periodic
inspection, maintenance and testing of facilities all around the plant.

Fire section conducts regular training programs to train all workers for handling the fire
fighting equipments. Besides this, they also train workers for extensive fire fighting.
Health safety environment and fire management in Haldia Petrochemicals Limited is an
integrated approach to manage the risks, associated with a large petrochemical complex,
handling enormous quantity of hydrocarbons. Various management strategies have been
deployed to ensure that -
a. Adverse risks are minimized.

b. Corrective action is put in place whenever any deviation is observed.
c. Adequate facility is available to handle emergency scenario occurring due to
catastrophic failures, if any, owing to natural or man made calamities.
The basic function of health section is to ensure preventive and curative treatment for the
workers inside the complex. It consists periodic medical examination for own and
contractor employees for various physical hazards and chemical exposure hazards
(exposure to Benzene, Butadiene, Hexane etc.), curative treatment to associate employees
for any illness or injuries happening inside the complex, preliminary treatment to severely
injured persons till their condition is stabilized and are fit to move to bigger hospitals and
organized training programmes on health awareness and first aid procedure.
The environmental management in Haldia Petrochemicals Limited is based on the

concept of waste prevention. Most of the processes have been designed for maximum
recycle of effluents to prevent liquid waste generation. The clean fuel is used in process to
prevent air pollution. However, in spite of state-of -the-art technology, some amount of
waste is generated from the process. The function of environmental section ensures
proper treatment of wastes, statutory compliance and minimum waste generation.
The gaseous pollutants from Haldia Petrochemicals Limited are mostly SO2, NO2 and
hydrocarbon. Haldia Petrochemicals Limited uses sulphur free gas as fuel for the cracker
heaters in Naphtha Cracker Unit. Low NO2 burners are adopted in the furnaces. All these
make emissions of N02 and S02 quite low and particulate matters practically negligible.
152
The impact of air pollutants released from Haldia Petrochemicals Limited is negligible on
the environment, surrounded by it.
The source of fugitive emitted from Haldia Petrochemicals Limited is the storage tanks
and spheres and some likely loss from pump or valve glands. International standards have
been strictly maintained during the design of storage tanks, spheres, valves and pumps to
minimize fugitive emissions. To ensure that fugitive emissions are well within limit and
workers are not exposed to hazardous atmosphere, work zone air quality monitoring is
conducted at various locations in the plant on regular interval.
Haldia Petrochemicals Limited contains internal process control for wastewater treatment
plant. Water is used in petrochemical industry for cooling in heat exchanger, de
mineralized for power generation and process use, process water during manufacturing
operation, service water for cleaning purposes and portable water. Effluent is generated in
the form of cooling tower blow down, de-mineralized neutralization waste, condensate
spillage, process waste; floor washing etc. Liquid waste management is done by Haldia
Petrochemicals Limited to reduce waste generation, liquid waste treatment, collection and
segregation of waste, waste treatment, inside battery limit treatment and out side battery
As per hazardous waste (management and handling) Rules, 1989 as amended in 2003,
various hazardous wastes are left out in a petrochemical-manufacturing complex. This
are- furnace or reactor residue and debris, tarry residues, oily sludge emulsion, organic
residues, residues from alkali wash of fuels, steal bottoms from distillation process, spent
catalyst and molecular sieves, slop oil from waste water and environment treatment plant
sludge containing hazardous constituents.
New initiatives have been taken for waste reduction or recycling. They are installation of
waste water treatment plant, using of slope oil or waste oil as additional fuel during the
process and modification of spent caustic handling section of Naphtha Cracker Unit to
reduce the oily waste generation. Process modification has been done in waste water
treatment plant to prevent alkaline condition, which adds suspended particles during
precipitation.
153
Different types of solid wastes are generated from the Haldia Petrochemicals Limited
complex. These are absorbents and spent catalysts from different plants. Bio-sludge from
waste water treatment plant and spilled polymer particles from the polymer plant is
already generated from Haldia Petrochemicals Limited. Absorbents, which are either
alumina or silica, could safely be used for land filling, as these are harmless. Spent
catalyst are initially drummed and later sent to processors of wastes catalysts for recovery
of heavy metals. Bio-sludge is collected from centrifuge and is shifted to secure on-site
storage pit. The currently generated waste or used oil is stored properly in drums.
The day and night time ambient noise levels monitored in and around the project area
revealed slightly high noise levels due to the extensive industrial, transportation and
commercial activities in the area. However such noise levels in industrial areas are within
the permissible limits.
Problems faced by Haldia Petrochemicals Limited:

Volatility in oil and financialjnarkets has increased amid fears over oil supply, as prices
are at record high due to security threats in Saudi Arabia, Nigeria and Iraq and an
increased global energy demand. This has lead to a spurt in the Naphtha.
Asia is the fastest growing market in polymers, almost all the planned capacity expansion
is in Middle East and in China. The Middle East crackers are based on low cost captive
Natural Gas which has a cost advantage on Naphtha based crackers.
Profit margins of Indian Polyolefin industry got squeezed when Union Finance Ministry
reduced import duty (9th January 2004 onwards) from 25 percent to 20 percent and
abolished Special Auxiliary Duty on Polyolefin, leading to effective reduction of tariff
barrier by 10.9 percent. This has direct and equivalent implication on domestic
Polyolefin industry.
Environmental issues rose by some state governments and subsequent ban on use of carry
bags affect the growth of the downstream sector.
154
Haldia Petrochemicals Limited is already operating at its peak capacity and any further
increase in capacity needs complex revamp for augmenting production and reduction of
fixed cost per tonnes of product. Today new plants are being built at 800-1000 kilo tonnes
per annum of Ethylene capacity to take advantage.
Socio-economic impact: In all developing countries including India, major industrial

changes and new strategies and mechanisms are required for the successful integration of
the main stream of international trade and investment and technological flows.
Technologically advanced companies like Haldia Petrochemicals Limited are fueling that
growth to fast tract development of the Indian economy. These companies have assumed
a leading role both in enhancing competitiveness and the increase export orientation of
local enterprises, and in maximizing social welfare through the creation of new
opportunities for increased employment and income.
The basic challenge of liberalization of global trade represents whether Indian companies
have the capacity to compete in open markets and also compete in their domestic markets
that are open to international competitors. To meet this challenge, Haldia Petrochemicals
Limited had started business development activities to increase competitiveness in the
geographically advanced markets through the state of the art products and the
development of small and medium enterprises, and that it is to provide support to local
enterprises in identifying appropriate sectors, sub sectors and products where exports
could be competitive. This task required varying degrees of industrial restructuring and
technological upgrading of products and process and closer linkages and partnerships to
be created with foreign enterprises.
Haldia Petrochemicals Limited considered the creation of new employment opportunities

to have the highest priority of new business and holds regular entrepreneur development
programmes. This is being achieved in an increasingly competitive entrepreneur to whom
technology and human resource development play an important role. Haldia
Petrochemicals Limited recognize that it can best be achieved through the adoption of
optimal technology and forms of organization that are matched to the needs of the region
and the development of sectors with ample opportunities for business and employment
generation.
155
Chapter-VJ Haldia Petrochemicals Limited, Haldia
Such assistance relate to the generation of investment interest, local entrepreneurial
development, industry information, linkages with foreign companies, promotion of small
and medium enterprises, promotional incentives and concessions etc for new investments
and exports and in general, the development of the right environment and climate for new
industrial investment including in less developed areas. Along with the development of
small and medium enterprises; Haldia Petrochemicals Limited supports industry institute
partnerships, as these institutes produce the workforce and the management of tomorrow.
The company works very closely with the Haldia Institute of Technology, IIT’s,
Universities such as Jadavpur University, Calcutta University and with management
institutes in providing training and projects to develop and train engineers and
management students for tomorrow’s world. Haldia Petrochemicals Limited also support
institutions like Ramakrishna Mission and other Non Government Organizations for the
upliftment of underprivileged people. It also supports for increasing the awareness of the
environment and v/orks with the relevant authorities including the Pollution Control
Board of Government of West Bengal to formulate policies and laws to conserve the
environment. The socio-economic relevance of Haldia Petrochemicals Limited in West
Bengal is paramount, as it has started the new industrial resurgence of West Bengal; bring
in investments as well as foreign direct investment into the state, making the state one of
the most favoured investment destination. This has leaded to increase of employment
opportunities as well as development of large number of small and medium enterprises
(699 units from 1998 to march 2005) in the downstream sector in West Bengal.
References:
■ Collection of data from the departments like Personal, Finance, Manufacture, Lobour,
Fire and Safety etc., Haldia Petrochemicals Limited, Haldia, 2009.
■ Field survey, Haldia Petrochemicals Limited, Haldia, West Bengal, 2009.
* Haldia Petrochemicals Limited, (2005-06,2006-07, 2007-08), Annual report.
* * * *
156

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Chapter-VI

Chapter-VI Haldia Refinery - Indian Oil Corporation 103

Satellite Imagery of Haldia Refinery-lndian Oil Corporation,

Source: Google Earth view, 2011.

Chapter- VI Haldia Refinery’ - Indian Oil Corporation 104

Chapter-VI Haldia Refinery - Indian Oil Corporation 105

Chapter- VI Haldia Refinery - Indian Oil Corporation 106

Table: 6.8 Production and

2003 109 104 •V .V iV !v

2007 140 121 o hi ,:¥ :*

Source: Haldia Refinery -IOC, 2009 (Table-6.8)

Composition of crude oil: Complex mixture of thousands of chemical compounds that

Chapter-VI Haldia Refinery - Indian Oil Corporation 107

Small quantities of metals are usually

Crude oil is transported through tanker ° ■§, C/)

Haldia refinery. Source: Haldia Refinery -IOC, 2009(Table-6.9)

Table:6.10 Crude oil price in importing

Source: Haldia Refinery -IOC, 2009(Table-6.10)

Chapter-VI Haldia Refinery - Indian Oil Corporation 108

The salt of crude is removed by desalter technique. It is then passed in pre-fractionators

Chapter-VI Haldia Refinery - Indian Oil Corporation 109

Table:6.11 Yield pattern of Vacuum Distillation Unit II of Haldia refinery, 2008

Designed yield Actual yield

Source: Haldia Refinery -IOC, 2009

Yield pattern of Vacuum Distillation Unit-ll of Haldia refinery,

Vacuum Spindle Light oil Inter oil Heavy oil Vacuum

Components □ Design yield

Source: Haldia Refinery -IOC, 2009(Table- 6.11)

Chapter-Vl Haldia Refinery - Indian Oil Corporation no

Table:6.12 Different process units and their uses in Haidia refinery

SI. no. Name of process unit Technology used

Chapter-VI Haidia Refinery - Indian Oil Corporation 111

Chapter-VI Haldia Refinery - Indian Oil Corporation 112

Facilities provided to the employees:

than normal 8.3 percent.

treatment with free of cost.

Chapter-VJ Haldia Refinery - Indian Oil Corporation 113

only. The rate is same for all officers and stuffs.

officers and staffs.

Table:6.14 Products of Haldia refinery and their use

Serial no. Products Use

Chapter-VI Haldia Refinery - Indian Oil Corporation 114

Table:6.15 Products despatch through different modes of transportation from

Table:6.16 Production details of Haldia refinery, 2007-2008

Total 5615002 5199250

Chapter-VI Haldia Refinery - Indian Oil Corporation 115

Table:6.17 Deviation of crude oil price in importing countries of Haldia refinery

Chapter-Vl Haldia Refinery - Indian Oil Corporation 116

Source: Haldia Refinery -IOC, 2009

—Brent —Dubai —*— Indian Basket

Source: Haldia Refinery -IOC, 2009(Table- 6.17)

Chapter- VI Haldia Refinery - Indian Oil Corporation 117

Account details of Haldia refinery,

Value of Cost of raw Net processing

Source: Haldia Refinery -IOC, 2009(Table- 6.18)

Table:6.19 Account details of Haldia refinery, 2006-07 and 2007-08

Account details 2006-07 2007-08

Chapter-VI Haldia Refinery - Indian Oil Corporation 118

Operating cost of Haldia refinery ,2006-07 and 2007-08

Production value of Haldia refinery, Cost of raw materials in Haldia

Source: Haldia Refinery -IOC, 2009(Table-6.19)

Chapter-VI Haldia Refinery - Indian Oil Corporation 119

Table:6.20 Crude oil prices in Haldia refinery, 2006-07 and 2007-08

Source: Haldia Refinery -IOC, 2009