Manali Petrochemicals Halts Chennai Plant Operations Due to Propylene Supply Cut by CPCL
Manali Petrochemicals Ltd (MPL) suspended operations at its Chennai Plant-1 after Chennai Petroleum Corporation Ltd (CPCL) ceased propylene supply. CPCL's action stems from a Ministry of Petroleum and Natural Gas (MoPNG) directive to prioritize Liquefied Petroleum Gas (LPG) production for national energy security, discontinuing other petrochemical derivatives like propylene. MPL, which exclusively sources propylene from CPCL, deems this a force majeure event. While Plant-2 continues to operate on existing inventory, MPL is evaluating the unestimable financial implications.
Manali Petrochemicals Ltd (MPL) has announced the temporary suspension of operations at its Plant-1 in Chennai. This critical decision was prompted by the immediate cessation of propylene supply from Chennai Petroleum Corporation Ltd (CPCL), MPL's sole supplier of this indispensable feedstock. CPCL justified its action by citing a directive from the Ministry of Petroleum and Natural Gas (MoPNG), which mandates the prioritization of Liquefied Petroleum Gas (LPG) production.The MoPNG's directive instructs CPCL to exclusively and primarily dedicate crude oil processing at its refinery towards LPG output. This strategic move aims to bolster domestic fuel availability and enhance national energy security, particularly in light of significant disruptions to international crude oil and petrochemical supply chains caused by ongoing geopolitical conflicts in the Middle East. Consequently, CPCL has been directed to discontinue processing crude oil for other downstream petrochemical derivatives, including propylene, for the directive's duration.MPL has characterized the shutdown as a force majeure event, stemming from a sovereign regulatory directive issued by the Government of India, and thus beyond the company's control. While Plant-1 is suspended, Plant-2 is currently operating using existing feedstock inventory. MPL is actively assessing the ramifications of this supply disruption and is undertaking necessary measures to fulfill its obligations to stakeholders. The company has stated that the financial impact of this ongoing force majeure event cannot be estimated at this juncture, with further developments to be communicated to stock exchanges as they arise. MPL manufactures propylene oxide and related petrochemicals for various industries.
