India’s IOC to sell 10% stake to fund petchem expansion

17 September 2010 10:08  [Source: ICIS news]

MUMBAI (ICIS)--Indian Oil Corp (IOC) plans to sell a 10% stake towards the end of the year to raise Indian rupees 100bn ($2.17bn) to fund expansion plans in states of Orissa, Gujarat and Tamil Nadu, a company source said on Friday.

The lack of funds had forced the state-owned IOC to put on hold its petrochemical projects in Paradip, Orissa state and Koyali in Gujarat state, the source said.

“The sale of shares will allow IOC to begin work on the stalled projects,” the source added.

India’s Ministry of Petroleum and Natural Gases in early September decided to give the go ahead for a sale of 10% stake in IOC and a 5% stake sale in Oil and Natural Gas Corp (ONGC), according to media sources.

The infusion of funds would also allow IOC to go ahead with its 2.5m tonne/year LNG terminal and an associated 1,000 mw power plant in Ennore, Tamil Nadu state, the source added.

At Koyali, IOC plans to set up a paraxylene-purified terephthalic acid (PX-PTA) facility.

While feasibility studies had been completed in March, the company had not begun construction as it was in the process of securing finance for the project, the source said.

At Paradip in Orissa, IOC is constructing a 15m tonnes/year refinery which will be ready by 2011-2012.

In addition to the refinery, the Paradip complex will house a crude and vacuum distillation unit, a hydrocracking unit, and a delayed coker unit in the first phase of development, the source said.

The facility is expected to house paraxylene, polypropylene and styrene production units in addition to other derivative units according to an earlier ICIS report.

The cost of the petrochemical project in Paradip would come to around Rs150bn, the source added.

At Ennore in Tamil Nadu, IOC will build a 2.5m tonnes/year LNG terminal expandable to 5m tonnes/year.

The gas terminal is expected to be commissioned by 2015, according to IOC’s website.

($1 = Rs 46.15)

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By: Priya Jestin

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