The Chennai Petroleum Corporation (CPCL), which is setting up a 500 mw captive power project in Manali, Chennai, has initiated talks with public sector power companies National Thermal Power Corporation (NTPC) and Neyveli Lignite Corporation (NLC) to offload a strategic stake.
The move comes in the wake of PSEG Global Inc of the US and Larsen & Toubro deciding not to go ahead with the project. Previously, CPCL was in talks to offer a 26 per cent stake to both L&T and PSEG Global in the power project.
The proposed power plant has an estimated project cost of Rs 2,837 crore and will operate with the refinery's residue as the feed stock.
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Having already received the government's go-ahead, the refining company is currently striving to "award and complete the detailed project report (DPR) in the shortest possible time", according to the company.
CPCL, in which Indian Oil Corporation has recently acquired a 51 per cent equity, has already completed the other studies in connection with the project.
Meanwhile, the company will shortly be signing a memorandum of settlement (MoS) with the Southern Petrochemicals Industries Corporation (Spic) as the last step towards exiting from the National Aromatics & Petrochemical Corporation (AROCHEM) due to economic unviability. The government has already approved the MoS which will settle the disputes between Spic and CPCL.
Also, the company has tied up with Solomon Associates Inc of the US to enter into an agreement for improving the profitability of the company. Through the tie-up, CPCL is preparing an action plan to narrow down and ultimately close gaps in the performance of its Manali refinery in a phased manner.
During the previous fiscal, the company's net profit dipped 14.46 per cent to Rs 122.43 crore in spite of a 29.22 per cent jump in its net sales which touched Rs 6,982.69 crore during the previous fiscal.