ONGC-GSPC venture looks to rope in equity partner to fund project costs.
GAIL India, the country’s largest gas marketing and distribution company, plans to pick up 10 per cent stake in ONGC Petro Additions’ (OPaL) petrochemical complex project coming up in Dahej. The size of the deal is pegged at Rs 1,500-2,000 crore, sources close to the development said.
A high-level meeting was held last week in this regard in New Delhi where the companies discussed the proposal. Besides GAIL, Petronet LNG (PLL), another PSU, is also aiming to pick up 5 per cent stake in the project, the sources added.
ONGC holds 26 per cent stake in OPaL while government-run Gujarat State Petroleum Corporation (GSPC) holds 5 per cent equity. Other state PSUs, including Gujarat Narmada Valley Fertilizers (GNFC), have also evinced interest in picking up equity in the project, according to the sources.
OPal will finalise on Indian equity partners in the next couple of months. ABN-Amro and Rothschild have been roped in for the company for the purpose.
The projected cost of the petrochemical complex unit was revised last year to Rs 12,440 crore. However, with the recent rise in cost of input materials, including rising crude oil prices, will see the project cost escalate by 20-30 per cent, the sources said.
A dual feed ethylene cracker of 11 lakh tonne per annum (TPA) has been planned of which OPaL aims to sell 3 lakh TPA in the open market.
The petrochemical complex will come up on 500 hectares in the Dahej SEZ with an extraction unit near it on 55 hectares. ONGC holds 24 per cent stake in the Dahej SEZ while the Gujarat Industrial Development Corporation (GIDC) holds 26 per cent. OPaL is also planning to fund about 20 per cent of the project cost by way of an initial public offer (IPO) next year.
Global players like Japan Polypropylene Corporation (JPP), a joint venture between Chisso and Mitubishi Chemical Corporation, LyondellBasell Industries, Ineos group, Mitsubishi Chemicals, Mitsui, West Asia-based financial company QIP group have also shown interest in the project.
