RIL plans Rs 3000 cr Venezuela JV

Pequiven to use Reliance expertise in making petrochemicals from refinery by-products.

Reliance Industries is in talks with Venezuela's state-owned Pequiven to form a joint venture to manufacture plastics, resins and other petrochemicals from refinery by-products.

A Reliance delegation is expected to visit Venezuela in the next few weeks to sew up the deal, sources close to the development said.

The plan is to set up a project at Paraguana in Falcon state of Venezuela, utilising Reliance's experience in producing petrochemicals from refinery by-products, they said. The by-products would come from the 9,56,000 barrel-a-day refining complex in Paraguana.

According to the sources, RIL could invest anywhere between Rs 2,000 crore and Rs 3,000 crore for the project. Reliance officials were not available for comments.

State-owned profit-making firm, Pequiven (Petroqu¡micas de Venezuela), is the largest petrochemical company in Venezuela, incorporated in 1977.

The invitation to Reliance is part of Venezuela's plans to more than double petrochemical production "� from 11.4 million tonne to 25 million tonne "� by 2012 at an investment of $10 billion. About 50 per cent of the investment will be made by the state, and the rest will come from foreign investors.

Venezuela, an OPEC (Organisation of Petroleum Exporting Countries) member, is among the world's top 10 oil producers and top five oil exporters.

The proposed expansion of Venezuelan petrochemical industry will come from expansions of old plants and greenfield projects on the western Paraguana peninsula and in the eastern city of Jose, where US oil major Exxon Mobil has proposed a $3 billion plant.

Venezuela sells much of its petrochemical products as raw materials to other countries, where they are converted into final products.

The country seeks to increase output from its petrochemical and natural gas industries to help decrease its reliance on oil sales, which currently account for about half of government revenue.

Pequiven's major plants in Venezuela are at El Tablazo, Mor¢n and Jos. El Tablazo, the largest complex, produces ammonia, urea, polystyrene, ethylene and propylene.

The Mor¢n plant manufactures fertilisers, chlorine, caustic soda and sulphuric acid. The Jos complex manufactures LNG, methanol and methyl-tertiary butyl ether, primarily for exports. Venezuela has enough gas reserves to meet the energy needs of the country till the next century.