A severe cyclone is close to making landfall Friday in India's eastern state of Odisha, home to Indian Oil Corporation's Paradip refinery, as well as the ports of Dhamra, Gopalpur and Paradip.
"We are closely monitoring the situation, but operations at the Paradip refinery have not been suspended yet. All precautions have been taken," an IOC official told S&P Global Platts.
Cyclone Fani is expected to generate wind speeds of up to 170-180 km/hour, the state-run India Meteorological Department said, adding that it would make landfall on Friday. Early Friday, the cyclone lay centered about 65 km southeast of Gopalpur.
Paradip is the largest refinery in state-run IOC's portfolio of 11 refineries. It can process 100% high sulfur crude oil to produce products such as LPG, propylene, Euro IV and V-compliant gasoline, diesel, kerosene, aviation fuel and petroleum coke.
"So far, there are no reports of the refinery being taken offline. Paradip was reported to be operating normally. However, it is reasonable to assume that run rates at the refinery along the path may be reduced as a precautionary measure," said Lim Jit Yang, advisor, oil markets, at S&P Global Platts Analytics.
In March, the capacity utilization level at Paradip refinery, which was commissioned in early 2016, stood at 112%. Its utilization stood at 97% in fiscal 2018-2019 (April-March).
Authorities have evacuated close to a million people from coastal areas to safer places.
India's Vizag refinery, situated 6-8 km from the coast, is also on high alert although regular operations have not been suspended.
"Refinery operations are normal," an official said late Thursday.
In March, the refinery recorded 121.5% capacity utilization. In fiscal 2018-2019 (April-March), utilization stood at 118%.
"Some operations at ports in Odisha have been temporarily suspended. But we are waiting for more details," one source said.
