In a bid to fast-track execution of the ambitious petrochemical complex at Dahej in Gujarat, ONGC Petro additions Ltd (OPaL) is aiming to achieve financial closure of its project by November 2011, which will be preceded by a lenders' meet by September-October this year.
Top company official informed that the project, which was conceived in 2006 would require additional capital, which is likely to be raised through public issue or from financial institutions. The company is putting several measures to expedite execution of the project to meet the deadlines.
"We have consolidated our operations and offices for faster execution and quick decision making. Work contracts have already been issued and nearly 72 per cent work is completed so far. We have called for a lenders' meet by September-October this year and by November we aim to achieve financial closure for the project. Once that is done, we can think of raising additional funds either by way of initial public offer (IPO) or through financial institutions," said PSV Rao, chief executive officer, OPaL.
"We had offices of different decision making authority located in different regions of the country, which made decision making time-consuming. But now we have consolidated our offices under one roof at Vadodara closer to Dahej. This will expedite the execution of project," said Rao added.
The company has set October 2013 as a deadline for the project completion and starting commercial production. At the completion, the cracker plant will have capacity of 1.1 million tonnes per annum and would employ nearly 1000 people on plant. The petrochemical complex, spread on 500 hectares, would produce polymers including HDPE and LLDPE, chemical intermediates and polypropylene. The company would export 50 per cent of its production, while in the domestic market it would lock horns with private sector giant, Reliance Industries Limited (RIL) especially in the polymers segment.
"We are not looking at competing with anyone. This project is just a value addition for us as the raw material feed stock including C2, C3 and Naptha are available with ONGC. So it made a good sense to diversify on related specialisation for the company," said Rao.
The project suffered with cost overrun due to continued delay in commissioning. The delay led to a rise in the project cost by about 50 per cent from Rs 12,500 crore in 2006 to about Rs 19,500 crore, informed Rao, who has recently took charge of the OPaL operations. OPaL is a joint venture of ONGC, GAIL and Gujarat-government promoted Gujarat State Petroleum Corporation (GSPC). OPaL has also entered into a long term supply agreement with ONGC for C2-C3 from Hazira and Uran.