India’s ONGC to pick petrochem JV partner by December

19 March 2009 16:14  [Source: ICIS news]

NEW DELHI (ICIS news)--India’s Oil and Natural Gas Corp (ONGC) plans to select a strategic investor for its petrochemicals joint venture ONGC Petro-additions Ltd (OPaL) by December 2009, OPaL CEO PK Johri said on Thursday.

Johri said the company had kept its door open to all companies that originally responded to its invitation to invest in OPaL.

ONGC was currently proceeding with a second round of discussions with the UK’s INEOS, the NetherlandsLyondellBasell and Japan’s Itochu Corp.

The company said it would offer a 25% equity stake to the selected investor, which it hoped could offer capabilities in technology, marketing, or both.

Both INEOS and LyondellBasell are the leading process licensors for polymer and related technologies and have a significant presence in global polymer markets.

ONGC had recently opened the bids received from process licensors for the downstream polyethylene and polypropylene units  at its petrochemical complex, which will be located at Dahej, in Gujarat state, Johri said. 

In December 2008, ONGC appointed Germany’s Linde and South Korea’s Samsung Engineering for the joint engineering, procurement and construction (EPC) contract for the complex’s dual-fed cracker and associated units.

ONGC has already agreed in principle to offer a 19% stake in OPaL to GAIL (India). OPaL has proposed to offload the remaining 25% equity stake in the public through an initial public offering in 2011.

ONGC has a controlling stake of 26% in OPaL, while Gujarat State Petroleum Corp (GSPC) has a 5% equity stake in the venture.

The Indian rupees (Rs) 158.7bn ($3.09bn) complex is slated for commissioning in October 2012.

Johri said OPaL would hold separate talks with the companies that responded to its invitations in 2007 and 2006 for setting up units based on the complex’s products streams.

The products included polymer resins and intermediates, such as carbon black feedstock, butadiene and styrene.

($1 = Rs51.23)

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