The petrochemical shift that could quench LPG output thirst

India may have to lean more on West Asian nations for supplies of liquefied petroleum gas (LPG), a cooking fuel, in the coming years after Indian state-run refiners drew up big plans to diversify into producing more profitable petrochemicals.

- S DINAKAR

This shift leads to reduced LPG output, Indian refining executives said.

The mantra for state-run oil companies, from Indian Oil Corporation (IndianOil) to liquefied natural gas (LNG) importer Petronet LNG, which are looking to diversify their businesses from lower-margin fuels, has been valueadded petrochemicals.

Domestic production of LPG declined by 4.5 per cent in the April-June quarter from a year earlier, sending imports higher by 21 per cent to meet the growing demand for the fuel. Imports accounted for around 65 per cent of the country's consumption of LPG.

IndianOil, the country's biggest refiner, aims to more than double the Petrochemical Intensity Index of its refineries to 15 per cent by 2030, with petrochemical expansions integral to all refinery expansions, said company Chairman SM Vaidya in the latest annual report.

IndianOil's petrochemical strategy is primarily based on utilising captive feedstocks, he said.

Propylene, for instance, is a captive feedstock, according to a McKinsey report. So is LPG.