Paradip, July 8: The Indian Oil Corporation Limited has advanced the deadline for the full-fledged commissioning of the Paradip oil refinery project to December.

The Rs 34,555 crore under-construction project located near Paradip port had initially been scheduled for commissioning in 2012-13. The project was announced in March 2006, with an initial installed refining capacity of nine million tonnes per annum (MTPA). Later, its capacity was enhanced to 15MTPA.

However, multiplicity of factors, including shortage of labour, law and order related issues, hindered the smooth sailing of the greenfield refinery project.

While Paradip is lined up for the ambitious Rs 2.74 lakh crore worth Petroleum, Chemicals and Petrochemicals Investment Regions project, the refinery plan is acting as an anchor tenant of the mega venture. The successful commissioning of the Indian Oil Corporation's oil refinery holds the key to the region's economic growth.

At present, the key components of the project are undergoing trial run. The trial test has so far been successful and trouble-free. However, several such tests are still being conducted to ensure foolproof operation, which is a highly skilled exercise. As there has been shortage in highly skilled manpower, it is causing the delay, said a company official.

"The refinery project has reached its last stage with over 98 per cent construction coming to an end. Ongoing construction, which is highly skilled in nature, is fast progressing on a war footing. Engineers, technical consultants from oil refineries across the country are on the job round-the-clock. Various vital components of the refinery have already been subjected to successful trial run. In all likelihood, the project would be fully commissioned towards the year-end," said general manager of the Paradip refinery W.R. Barbara.

Construction of the atmospheric vacuum unit, the central component of the refinery, has been over and successfully put under trial test. Crude processing was started in the unit a couple of months ago. Other ancillary project components are well on their way to completion stage.

"Though earlier shortage of skilled manpower had posed hindrances for acceleration of the project, work is fast progressing at present, and the refinery is certainly going to be commissioned full fledged by December," said a company official.

The oil refinery complex would become a major petro-chemical hub. Apart from the oil refinery, the proposed projects such as the Rs 3,150-crore worth polypropylene unit and plastic park would act as catalyst in the socio-economic development of the state, the official said.

The 15 million-tonne-per annum capacity refinery project is valued at an estimated cost of Rs 34,555 crore, of which nearly Rs 32,000 crore has already been used for the project construction.