The unit proposes to manufacture 500,000 tonnes of ethylene at this complex for which the main feedstock will be naphtha from Hindustan Petroleum Corporation's 9-million-tonne refinery at Bhatinda, which is scheduled to be commissioned in 2002. Sources say that availability of this petroproduct is the key to the viability of the petrochemicals complex.

PSIDC had planned this project with Bharat Petroleum Corporation (BPCL), but the latter pulled out following findings of a feasibility study conducted by a prominent research organisation. Subsequently, PSIDC also held a round of talks with the Indian Petrochemicals Corporation, but the latest update indicates that IOC is the more probablepartner for the plan.

It remains to be seen if the petrochemicals complex is the best bet as experts are of the view that this is not the right time to enter the industry following a dip in world prices of key products. It may be recalled that BPCL and the Oil and Natural Gas Corporation had planned a paraxylene venture at Hazira three years ago. But it was put on hold owing to high project cost coupled with falling prices of paraxylene the world over.

Engineers India has been asked to do a feasibility study and it is only after its findings are submitted will the two PSUs consider going ahead with the plan and seek alternative options like gasoline.

In the case of Bhatinda petrochemicals complex, its fate is directly linked to the HPCL refinery. Interestingly, PSIDC is the co-promoter here with a 26 per cent stake for the Rs 10,000-crore project. However, once Exxon Corporation of the US enters the picture, it will take over this role and PSIDC will either withdraw or confine its stake to a nominalpercentage.

The refinery will produce approximately 4.8 million tonnes of diesel and 1.2 million tonnes of kerosene besides other various other petro-products like liquefied natural gas, naphtha, petrol, aviation turbine fuel. A power plant has also been planned near the refinery which will use fuel oil as the feedstock.

The petrochemicals complex will, therefore, depend on timely commissioning of the refinery and, more importantly, adequate availability of naphtha. Experts are also of the view that this need not be a constraining factor as potential partner, IOC, could also help by supplying the feedstock from its Panipat refinery.

Incidentally, IOC is in talks with IPCL for a petrochemicals joint venture at Panipat. The two are expected to enter into a 50:50 joint venture once they finalise the products to be manufactured, but this will take some time given the present uncertain state of the petrochemicals industry.