Oil and Natural Gas Corp (ONGC) is looking at an initial public offering (IPO) of its subsidiary that is building a Rs 13,600 cr petrochemical plant at Dahej, closer to project completion in 2012.
ONGC is considering selling up to 25% of the equity shares in ONGC Petro-additions Ltd (OPaL), the special purpose vehicle formed for setting up the petrochemical complex at Dahej SEZ, a senior company official said.
It plans to give 19% equity stake in OPaL to state-run gas utility GAIL India, while another 25% interest may be offered to Petronet LNG and Bharat Petroleum or a strategic partner.
"We are not considering the IPO right now. The offering may happen in 2010-11 or even closer to the project completion in 2012," the official said.
ONGC holds 26% stake in OPaL and five per cent is with Gujarat State Petroleum Corp (GSPC). OPaL will use C2-C3 (ethane and propane) compounds extracted from imported liquefied natural gas (LNG) to make polymers at the proposed plant.
The Rs 1,100-crore plant to extract C2-C3 from the LNG that Petronet imports from Qatar would be ready by year-end but the petrochemical project would not come up before 2012.
ONGC would in the interim period sell C2-C3 compounds to companies like Reliance-owned IPCL or even export, he said.
While Gail had sought equity in OPaL as it already had a presence in petrochemical business, Petronet may be offered an equity as it imports five million tons a year of rich-LNG (gas containing C2-C3 compounds). The official said the project is being funded in 2.55:1 debt-equity ratio.
