BPCL Polyol Project Shuts Down after Outlaying 425 Crores

The BPCL has abandoned its Kochi refinery Polyol project after spending 425 crores on the same, owing to a significant rise in the project cost. The current evaluated price associated with the project is considerably higher than the earlier estimated cost, leading to the project's discontinuation. As per Rameshwar Teli (Union Minister of State for Petroleum and Natural Gas), “the funds have primarily been spent on the project report preparation, site development, and consultancy for project management.”

The Polyol Project was approved in September 2018, and the foundation for the same was being laid in January 2019 by the Prime Minister of India, Mr Narendra Modi. The US-based firm, Flour Corporation, was chosen as the project management consultancy for this project, having all the significant approvals, including the approval of key environment clearance. This Kochi-based project aimed to manufacture petrochemicals only to be used in India to produce polyurethane.

The Polyol market of India is mainly dependent upon imports to meet the downstream demand in the country, to manufacture polyurethane, further used to produce flexible foams, rigid foams, adhesives, and paints. The imports of Polyol have been inclining from the year 2015-16 to 2019-20. However, it declined in the year 2020-21 after the outbreak of covid-19. In 2015-16, the import quantity of Polyol in India was 1,86,239 metric tonnes, which eventually expanded to 2,39,755 metric tonnes in 2019-2020.

If the Kochi Refinery Polyol Project were a success, it would have decreased the dependence of India on imports of Polyol to manufacture polyurethane in the domestic market. Furthermore, the cessation of this project would severely impact the outlook of Petrochemical Project Park as Polyol is the upstream for industries that are likely to operate under Petrochemical Project Park.