Shell arm, ONGC ink pact

Shell Bitumen India Private (SBIPL), a subsidiary of Shell group of companies, has entered into a pact with Oil and Natural Gas Corporation (ONGC) for manufacturing bituminous products and marketing.

Subir Raha, chairman and managing director, ONGC and Vikram Singh Mehta, chairman, Shell India, have signed the pact close on the heels of a wide-ranging MoU signed last month.

Followed by the memorandum of understanding, ONGC has entered into a three year contract with Malaysian government owned Asian Supply Base Sdn Bhd (ASB) to upgrade the existing Nhava supply base of ONGC to international standards.

ASB will work as consultancy and the work will be executed in two phases. The first conceptualisation phase will be completed in three months and the second phase will cover the project implementation wherein ASB will provide technical design and construction supervision services.

The MoU between ONGC and shell is aimed at carrying out a joint market research to evaluate India's bitumen and value added bitumen (VAB) market potential over the next 10 years and conduct an economic evaluation of investing in a stand alone refinery in India to be established at East or West Coast.

Bitumen, a tar-like substance, is a by-product of crude oil. Bitumen is used for road surfacing and for roofing.

"For both the MoU process and for any future project joint ventures, ONGC, Mangalore Refinery and Petrochemicals (MRPL) and SBIPL will jointly formulate commercialisation policies.

The road infrastructure building industry in India is growing rapidly and significantly. This JV between ONGC and Shell will provide innovative solutions for building world-class roads in India in urban areas, and will also enhance the quality of rural roads," according to an ONGC official.

MRPL, a subsidiary of ONGC and SIBPL, would jointly constitute the study team and implementation team for this MoU.

MRPL owns and operates a refinery at Mangalore, India, with a bitumen production capacity of 250,000 tonne per annum.

"The JV will operate within the business framework of partner companies and work out the most economic option to meet the existing market demands," said official.