The Indian Petroleum Commission approved the establishment of India's first large maleic anhydride plant at its Panipat refinery and petroleum complex (PrPC) to produce value-added chemical products.

From the approval of phase I investment, the project will be put into use within 54 months with a capital expenditure of rs. 36.81 billion.

The project plans to produce 1.2 million tons of maleic anhydride (MAH) per year for the production of special products, such as polyester resin, surface coatings, plasticizers, agricultural chemicals and lubricating oil additives. The plant will also produce 20000 tons of 1,4-butanediol (BDO) per year for polyurethane and polybutylene terephthalate (PBT), an engineering grade plastic and biodegradable fiber.

The plant will also produce another value-added chemical tetrahydroduran (THF) to accelerate the growth of the pharmaceutical industry. Tetrahydrofuran is also widely used in adhesives and vinyl films.

For the newly approved project, S.M. Vaidya, chairman of Indian oil company, said: "At present, these high demand chemicals are mainly imported from India. The MAH plant to be put into operation will reduce its dependence on imports and save about US $150 million in foreign exchange every year, thus strengthening the company's mission. In addition, in view of the great potential of India's petrochemical industry, petrochemical integration is the cornerstone of our future growth strategy.

"The project will consolidate the package of niche products of Indian oil and increase the lubricating oil and petrochemical integrity index of Panipat refinery to more than 15% after the implementation of refinery expansion plan."