BPCL planning Rs 1000 cr float for Bina unit

Bharat Petroleum plans to fund a part of its equity requirements for the 6 million tonne greenfield Bina refinery through an initial public offering of around Rs 1,000 crore. The IPO will be in the first quarter of 2007-08,

Ashok Sinha, the company chairman and managing director said.

The refinery has been spun off as a separate company, Bina-Oman Refinery Limited, in which BPCL will hold 50 per cent, financial institutions 23 per cent and Oman Oil Company a nominal two per cent stake. The remaining 25 per cent will be offered to the public.

Oman Oil was originally expected to take a strategic stake in the refinery and has already invested Rs 75.5 crore in the project. However, with the project getting delayed the company pulled out. The refinery has been hanging fire for over a decade now.

The refinery has now been reconfigured to conform to Euro IV requirements and is expected to cost around Rs 10, 400 crore. BPCL has already tied up the debt portion of Rs 6,400 crore, through a consortium of 20 banks led by the State Bank of India, Sinha said.

Sinha said that with the new configuration, the refinery would be able to process upto 85 per cent of the crude oil into A category distillates such as petrol and diesel, while the residues will be used to power the refinery.

Sinha said orders for all the reactors have been placed with Chinese manufacturers and that the construction work was expected to begin soon. He said the refinery would be fully operational by December 2009.

The six million tonne refinery will service BPCL's northern and central India markets. "Currently, we buy from others to fulfill our product demand of 5 million tonnes in these markets but with the commissioning of the Bina refinery, we will sell our own products," Sinha said.

Sinha said a pipeline from Vadinar port in Gujarat to Bina to carry the crude would be in place by June 2009. He said that the rights of way agreements are in place and the pipes have been ordered.