BPCL in talks with Manali Petro for its petchem palns

Plant is expected to provide revenues to the tune of about Rs 4,000 crore to the government in terms of taxes

State-run oil marketing company Bharat Petroleum Corporation Limited (BPCL) is said to be in talks with Chennai-based Manali Petrochemicals Limited (MPL), a leading petrochemicals player, to set up India’s single largest Polyurethane (PU) manufacturing plant in Kerala, three executives with the knowledge of the matter said.

The project, the executives added, will attract investment to the tune of around Rs 3,000 crore and will cater to industries like automotive, white good and others.

 

Both companies will have 50% stake each in the new joint venture. A pre-feasibility report is being prepared. The project will spread over in 150 acres of land next to the BPCL's existing facility at Kochi, Kerala.

 

"We are in preliminary talks with Manali Petrochemicals for propelynoxide. This would be separate from our plans with LG Chemicals," confirmed a senior BPCL official. He added, discussion with LG Chemicals on a petrochemical plant is going slow. “In fact, we fear, we may have to look at partners beyond LG Chemicals for their petrochemical plant at Kochi.”

However, R K Singh, Chairman and Managing Director, BPCL, declined being in talks with Manali Petrochemicals.

 

BPCL had last June, signed a JV pact with South Korea’s LG Chem Limited to set up a petrochemical plant near BPCL’s Kochi refinery complex.

 

The company, had last year said it plans to spend up to $2.51 billion over the next five years to expand its Kochi refinery. Under its expansion plan, the company decided to set up a petrochemical fluid catalytic cracker, which will generate 500,000 metric tons per annum of propylene, to help the company diversify into petrochemicals.

 

"The cracker project will be set up via the joint venture at an additional cost of Rs 40-50 billion, and is expected to be completed in the next four years alongside the refinery expansion plan," BPCL had said in a statement.

 

Interestingly technology for the new PU project, is tested and successfully implemented in Korea, though its origin from Europe, said the source, who requested for anonymity. While the propylene will be imported by BPCL, the conversion and market expertise comes from Manali Petro, which got over 25 years experience now.

 

The new indigenous plant is expected to go on stream by January 2017 and will cater to industries such as Automobile, Foams & Mattresses, Ancillaries, Paints & Inks, Insulations, Refrigeration and a host of other applications.

 

It was estimated the current requirement of PU in India is around 2.50 lakh tonnes, largely imported. The PU market in India currently being serviced by imports from some of the world’s leading petrochemical as well as Oil & Gas companies.

 

Sources said that the plant will provide revenues to the tune of about Rs 4,000 crore to the government in terms of taxes and will also help strengthen the highly fragmented PU industry in India by utilising its economies of scale.

 

This facility will provide employment to around 900 people directly and seven times indirectly.