Gail stake in OPaL project to come down

According to a PTI report, Gail India is putting a cap of Rs 1,000 crore on its investment in ONGC’s mega petrochemical project at Dahej as project faces major cost overrun. As a result, Gail is likely to own 11.6% stake in ONGC Petro-additions Ltd (OPaL), which is building a mega petrochemical complex at Dahej in Gujarat, compared to 19% it had picked up in 2008-09.
 
The cost of the project to build 1.1 million tonnes plant has been revised thrice upwards. The original project was estimated to cost Rs 12,440 crore, but it was revised to Rs 15,870 crore in end 2008, then to Rs 19,535 crore in June 2010 and now to Rs 21,396 crore.
 
Quoting a Gail official, the report said that in 2008-09 Gail had decided to invest up to Rs 1,000 crore in OPaL, which got it 19% stake. But now, with the board deciding to put a cap of already sanctioned Rs 1,000 crore, its stake will come down in the project as cost has gone up substantially.
 
The project, in which Oil and Natural Gas Corp (ONGC) has 26 per cent stake, was originally to be funded in 70:30 debt-equity ratio (70 per cent loan and 30 per cent equity contribution from promoters). However, this was to change to 60:40 debt-equity ratio at the date of commissioning, which is now estimated to be around February 2015.