State-run Oil and Natural Gas Corporation (ONGC) may rope in a strategic partner for its mega petrochemical plant before going for an initial public offering (IPO) of the unit at Dahej, in Gujarat, a company official said.
"We are talking to 3-4 foreign companies and may get through a private equity placement before the IPO," a senior company official said.
ONGC is talking to firms including Itochu Corp of Japan, Lyondell Basel and Ineos of UK, he said, adding that the private placement may happen by the year-end.
"We will go for an IPO of ONGC Petro-additions (OPaL) closer to the completion of the Rs 12,440 crore project, scheduled for the first quarter of 2013," he said.
ONGC holds a 26 per cent stake in OPaL, while gas utility GAIL India has 19 per cent. Gujarat State Petroleum Corp (GSPC) has a 5 per cent stake, while the remaining 50 per cent will be split between a strategic investor and the IPO.
The strategic partner may be given a 20-25 per cent stake.
The company is looking at markets in China, the Indian sub-continent (Pakistan, Sri Lanka and Bangladesh), Vietnam, the Philippines, Malaysia, some African countries and Israel for selling products like propylene and benzene from the petrochemical unit.
These products are used as source materials in the plastics industry.
The official said the petrochemical complex, which will be built by Q1, 2013, is being funded in a 2.55:1 debt-equity ratio and ONGC has got commitments from banks for over Rs 9,000 crore for the debt component.
OPaL will use C2, C3 and C4 (ethane, propane and butane) compounds extracted from imported LNG to make polymers at the proposed plant.
The Rs 1,100 crore plant for extracting C2-C3 from the LNG that Petronet imports from Qatar will be ready this year, while the petrochemical complex will come up by Q1, 2013. ONGC will in the interim sell the C2-C3 compounds to companies like Reliance, the official said.
