M Pradesh complex delayed

26 March 2001 00:00  [Source: ACN]

Madhya Pradesh State Industrial Development Corp's (MPSIDC) petrochemical complex has been further held up by a delay in a refinery project proposed near the complex.

The 300 000 tonne/year cracker is expected to start up at the same time as Bharat Petroleum Corp Ltd's (BPCL) joint-venture refinery, which will supply naphtha to the cracker.

Startup for the 6m tonne/year refinery has been put back to end-2004.

BPCL previously delayed the refinery commissioning from end-1999 to July 2004 (ACN 11 Sept, p31).

MPSIDC's cracker was first scheduled for startup at end-2000 but the project has been postponed several times because of difficulties in securing feedstock from the refinery.

The recent delay in the refinery commissioning was due to a reluctance by BPCL's partner Oman Oil to inject more funds into the joint-venture, Bharat Oman Refineries Ltd (BORL).

The company cited the long wait for environmental clearance and uncertain market conditions as reasons for not wishing to raise its existing 26% stake in BORL.

BPCL, therefore, last month decided to proceed with building the refinery using its own funds which could raise the company's existing 26% share in BORL.

It is unclear how much BPCL invested last month.

The remaining 48% of equity will be subscribed by institutional and retail investors.

BPCL is now in the process of selecting a contractor for the refinery project. The project's cost has been revised from Rs52.77bn (US$1.13bn) to Rs65.17bn.

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