State-run Indian Oil Corporation, the country's top refiner, plans to sell hydrogen-producing units at its plants to private sector entities, its chairman S. M. Vaidya said on Tuesday.
In her annual budget for the 2021/22 fiscal year presented last month, Nirmala Sitharaman, India's finance minister proposed the sale of some assets of state-run companies to mobilise funds.
To begin with IOC plans to sell two hydrogen units of 72,500 tonnes per annum capacity each at its 276,000 barrels per day (bpd) Koyali refinery in western Gujarat state by the end of 2021, Vaidya told reporters on the sidelines of an industry event. "We are starting with the Gujarat refinery. Let's see how it goes before we start the process for other refineries," Vaidya said.
IOC operates about a third of India’s 5 million bpd refining capacity.
Vaidya said the IOC will pay annual operation and maintenance charges to the new owner.
"We are trying to leverage hydrogen units. The asset value and O&M (operation and maintenance) cost will be taken into consideration for selecting a licensor or new buyer," he said. However, he said the firm had no plans to sell other units of the refineries for now. The sale of hydrogen units made sense, however, as IOC would be the sole customer of the hydrogen produced by the new owner from the units located at its Koyali refinery, he said.