MRPL eyes petrochem biz in Africa

Mangalore Refinery and Petrochemicals Ltd (MRPL), a subsidiary of Oil and Natural Gas Commission (ONGC), is planning to set up a joint venture with the State Trading Corporation (STC) of Mauritius to set up large storage oil terminals in Mauritius and jointly explore petroleum products market in African countries. The discussions are at a preliminary stage.

An in-principle agreement to set up a joint venture for large storage terminals has been agreed between MRPL and Mauritius government authorities, said R Rajamani, managing director, MRPL.

"At present Mauritius lacks large storage facilities for oil, which prevents large tankers to dock and supply. Once large storage terminals are in place, we could use these facilities and also save in logistics," he said.

He added it is too early to assess the investment required for the project.

STC of Mauritius is the sole authority for oil supply in that country through oil companies like Indian Oil and Shell. The joint venture could be beneficial for MRPL to not only augment its supplies, but also to tap the potential of the African markets.

Geographically, Mauritius is the gateway to enter South Africa and other African markets.

MRPL started exports of petroleum products last year to Dubai, with supplies to the Emirates Oil Company. With the planned expansion of the refining capacity from the current 9.69 million metric tonnes per annum (MMTPA) to 15 MMTPA by 2010, MRPL hopes to increase its exports.

Two weeks ago, MRPL and STC had entered into supply of one million MTPA of petroleum products worth over $ 2 billion for a period of three years to meet the entire petroleum products requirements of Mauritius.

According to the contract, MRPL will supply motor gasoline, diesel, aviation turbine fuel and furnace oil for a period of three years commencing from August 2007.

MRPL already has an existing supply pact with STC Mauritius to supply one MMTPA of various petroleum products which comes to an end in August.