State-run Oil and Natural Gas Corporation (ONGC) will launch an initial public offering (IPO) of a unit building a mega petrochemical plant at Dahej in Gujarat in 2011, even as a separate project that was to produce feedstock for the Rs 12,440-crore plant has been delayed by 10 months.
"We will go for an IPO of ONGC Petro-additions (OPaL) closer to the completion of the project (scheduled for February 2012)," ONGC Chairman and Managing Director RS Sharma told reporters on the sidelines of the CII conference here.
ONGC may offer up to 25 per cent equity in OPaL. "We needs things on ground to get a good price. We are not in need of money for next two years," he said.
It is also talking to world's leading chemical companies including Itochu Corp of Japan, Lyondell Basel and Ineos of UK for a strategic partnership in the plant being built in Dahej SEZ.
"We are looking for a strategic partner with either technology or a strong marketing network," he said.
ONGC holds 26 per cent in OPaL while GAIL India has 19 per cent. Five per cent is with Gujarat State Petroleum Corporation and up to 25 per cent may be given to strategic partners.
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The complex was to use C2-C3 (ethane and propane) extracted from imported liquefied natural gas (LNG) to make polymers. The C2-C3 extraction plant was to be completed by December 2008 but is now targeted for October as new facilities had to be added to handle larger quantity of gas.
The C2-C3 extraction plant was initially designed to handle 5 million tonnes a year of LNG but with imported volumes increasing to 7.5 million tonnes, new facilities had to be added.
Of the 7.5 million tonnes, only two-third is rich in C2-C3 compounds, an ONGC official said.
The company is looking at markets in China, Indian sub-continent (Pakistan, Sri Lanka and Bangladesh), Vietnam, Philippines, Malaysia, some African countries and Israel for selling the products like propylene and benzene it will make at the petrochemical unit.
These products are used as source materials in the plastics industry.
Sharma said the petrochemical complex, that would be built by December 2011, is being funded in 2.55:1 debt-equity ratio and ONGC has got commitments from banks for over Rs 9,000 crore for the debt component.
OPaL will use C2, C3 and C4 (ethane, propane and butane) compounds extracted from imported LNG to make polymers at the proposed plant.
The Rs 1,100-crore plant for extracting C2-C3 from the LNG that Petronet imports from Qatar would be ready by the end of the fiscal while the petrochemical complex would come up by February 2012. ONGC would in the interim period sell C2-C3 compounds to companies like Reliance, the official said.