2 Reliance arms mop up $925 mn for petro project

Two Reliance arms have raised $925 million (Rs 3,754 crore) in term loans to meet the infrastructural needs of the $6-billion Reliance Petroleum (RPL) greenfield refinery.

Reliance Ports & Terminals and Reliance Utilities have mobilised $500 million and $425 million, respectively. The former will utilise the fund for expansion of ports, storage and evacuation facilities at Sikka near Jamnagar, while Reliance Utilities will set up a natural gas-based power plant at Jamnagar.

ICICI Bank and Standard Chartered Bank were lead managers to the fund- raising. The Reliance spokesperon declined comments.

RPL has spent nearly Rs 19,000 crore or over 75 per cent of the investment required for setting up the 580,000 barrels a day refinery at Jamnagar, due to advance payments to contractors. The company has said the work for the project was 50 per cent complete and will begin commercial operations by December 2008.

The company, in which Chevron had 5 per cent stake, is setting up the project adjacent to Reliance Industries' 660,000 barrels a day refinery. In an unrelated development, the CEO of Niko, the partner of Reliance Industries in the Krishna-Godavari and Mahanadi deepwater blocks, said the Mahanadi block appeared to have better potential than the KG basin. "The Mahanadi block was the best thing Niko could possibly have," a Macquaire report, which was released today, quoted the Niko CEO as saying.

The research report said oil finds from these fields could have 100 per cent recovery rate.