Indian Oil Corp (IOC), nation's largest oil firm, is likely to sign a joint venture agreement with Nuclear Power Corp of India (NPCIL) this month to foray into nuclear power generation.
"Our board has given an in-principle approval for foray into nuclear power. We propose to sign a Memorandum of Understanding (MoU) with NPCIL later this month to explore options for forming a joint venture for setting up at least one nuclear power plant," a top company official said.
After the MoU is signed, the two companies will enter into confidentiality agreement wherein NPCIL will share details of the projects it is planning.
"We will look at the viability of each project and choose a project for joint execution. At that stage, we will go to our board again for investment approval," he said, adding IOC would be a minority partner in the venture.
IOC may take 26 to 49 per cent stake in NPCIL's upcoming Rs 28,050-crore 3,300 Mw Jaitapur plant in Maharashtra, Rs 18,000-crore 2,000 Mw Kudankulam unit in Tamil Nadu or a Rs 14,000-crore 1,400 Mw plant that may be located at Kakrapar in Gujarat or Rawatbhata in Rajasthan.
The move is part of the blueprint drawn by B M Bansal, the head of the company's new business ventures, to make IOC an integrated energy company. Under him, the company has already forayed into wind power generation and has joined hands with the Tatas for a thermal power plant.
"We have already forayed into wind power and nuclear power provides us with another avenue to diversify into clean energy generation," the official said.
Based on the capacity of the plant, the ball park cost estimate per Mw, varies from Rs 8-10 crore, depending upon whether the plant uses homegrown technology or sourced import technology.
If IOC's share is 49 per cent, the equity investment required in the nuclear plants may range between Rs 2,050 crore to Rs 4,120 crore. In case it chooses 26 per cent, then IOC's equity contribution may range between Rs 1,100 crore to Rs 2,190 crore.
The official said the company's plans to diversify into nuclear energy would not be at the cost of its planned investments in its core activities of oil refining and fuel marketing.
According to the long-term investment plans drawn up by the company, expenditure in its core business activities — made up of refineries, pipelines, marketing, R&D, gas and petrochemicals — would stand at Rs 53,250 crore, Rs 79,400 crore, and Rs 1,06,500 crore during the 11th plan, 12th plan (2012-17), and the 13th plan (20017-22) period, respectively.
On the other hand, the outlay on diversification plans such as exploration and production, renewables and power would be Rs 10,000 crore, Rs 16,200 crore, and Rs 20,200 crore in the three respective plans.
