New Delhi, Jan 2 (PTI) Iran is keen to invest in the Rs 35,700-crore expansion of Chennai refinery irrespective of economic sanctions imposed by the US against the Persian Gulf nation, IOC Chairman Sanjiv Singh said Wednesday.Also Read - Cairn Energy Gets French Court Order to Seize 20 Indian Government Properties in Paris

Indian Oil Corp (IOC) plans to pull down the 1 million tonnes per year Nagapattinam refinery of its subsidiary, Chennai Petroleum Corp Ltd (CPCL) and build a brand new 9 million tonnes unit in next 5-6 years. Also Read - EPFO Adds 13.36 Lakh Net Subscribers in January 2021, New Enrolments Up by 28%

National Iranian Oil Co (NIOC), which holds 15.4 per cent stake in CPCL, is keen to participate in the expansion project, Singh told reporters here. Also Read - Beware! Your Ration Card May be Cancelled in 3 Months if You Don't Do This

“They have said they want to participate and I think they should be able to invest,” he said.

After the US reimposed full economic sanctions against Iran beginning November 5, 2018, India is paying its third-largest crude oil supplier in rupees. These rupee payments are made into a UCO Bank account of NIOC.

The government has allowed NIOC to use the money it gets in the UCO Bank account for paying for commodities Iran buys from India as well as for the direct investment in Indian projects.

Naftiran Intertrade, the Swiss subsidiary of NIOC, holds a 15.4 per cent stake in CPCL. IOC holds 51.89 per cent stake in CPCL.

The expansion was to originally cost to Rs 27,460 crore but is now estimated to cost Rs 35,698 crore.

Officials said, CPCL plans to achieve financial closure of the refinery expansion in 2019. It also plans to build a petrochemicals plant of about 475,000 tonnes per annum capacity.

Detailed feasibility report for the expansion project is expected to be completed by June.

CPCL, formerly known as Madras Refineries Ltd, was formed as a joint venture in 1965 between the Government of India, AMOCO and NIOC having a shareholding in the ratio of 74 per cent, 13 per cent and 13 per cent.

In 1985, AMOCO disinvested, following which, the government held 84.62 per cent and NIOC 15.38 per cent.

The government later disinvested 16.92 per cent of the paid-up capital. The company was listed in 1994. IOC acquired the government stake in 2000-01 and holds 51.89 per cent stake in CPCL while NIOC has 15.40 per cent.

CPCL has two refineries with a combined refining capacity of 11.5 million tonnes per annum.

The Manali Refinery has a capacity of 10.5 million tonnes per annum and is one of the complex refineries in the country. Its second refinery is located in Nagapattinam at Cauvery Basin. This unit has a capacity 1 million tonnes per annum.

CPCL refineries produce LPG, petrol, kerosene, aviation turbine fuel (ATF), diesel, naphtha, bitumen, lube base stocks, paraffin wax, fuel oil, hexane, and petrochemical feedstocks.

The company posted a net profit of Rs 913 crore on a turnover of Rs 44,135 crore in 2017-18, according to the company website.

This is published unedited from the PTI feed.