₹800 Crore Boost: CPCL Fuels Lube Upgrade & Refinery Growth

Chennai Petroleum Corporation Ltd. (CPCL) is poised to nearly double its annual capital expenditure to ₹700–800 crore over the next two years. This includes ₹250–300 crore for routine maintenance and minor projects, and ₹400–500 crore earmarked for upgrading Lube Oil Base Stock (LOBS) units 2 and 3.

The Group II/III LOBS upgrade—intended to convert naphtha and high-speed diesel into premium lube base oils—is in the final planning stages. During its Q4 FY25 earnings call, CPCL’s management described it as a “highly profitable project,” ready for swift execution pending regulatory approvals.

Simultaneously, CPCL’s 9 MMTPA refinery expansion in Nagapattinam, Tamil Nadu, continues to move forward. Over 1,200 acres of land have been acquired, though the project still awaits a key clearance from the Cabinet Committee on Approvals (CCA). The ₹36,354 crore project is a joint venture with Indian Oil Corporation (IOCL), with IOCL holding a 75% stake and CPCL 25%.

The upcoming refinery will feature a petrochemical intensity index of 6% and will focus on polypropylene production, excluding naphtha from its product mix. A 1:2 debt-equity ratio is being considered, with final decisions pending. These strategic investments underscore CPCL’s shift toward higher-margin, value-added operations and expanded refining capacity.

News by Rahul Yelligetti.