05 November 2012 08:12 [Source: ICIS news]
The project will be implemented in northeastern Indian
“The joint venture of ONGC and Tata Chemicals which will construct the urea-from-gas plant will raise funds through sale of equity shares through an Initial Public Offering (IPO),” the official said.
“The government of Tripura would participate in the project by being a minority equity stakeholder of about 10% by investing about $37m in the project,” the official said.
The date of offer for the sale of equity would be close to the commissioning date of the project. The commissioning date would be decided on completion of the detailed project report under preparation by ONGC, the official said, adding that the normal gestation period of similar fertilizer project is about 48 months after completion of all mandatory approvals.
According to the official, the joint venture partners putting up the fertilizer project would have equity holding of Tata Chemicals 50%, ONGC 40% and Tripura government 10%. The $369m to be raised through the capital markets would be through sale of shares and proportionate dilution of shares of the principal promoters of the project.
The Tripura government had mandated ONGC to construct the fertilizer project leveraging latter’s gas fields in the province. ONGC then invited for expression of interest from private fertilizer companies for partnership and had selected Tata Chemicals from among six proposals.
The 1m tonne/year urea production plant would be located in close proximity to ONGC’s Khobal gas fields in Tripura where exploratory wells have indicated a gas flow of 150,000 cbm/day.
ONGC has 11 gas fields in Tripura and produced 643.9 million metric standard cubic meters (mmscm) of gas in 2011-12.
The government majority owned ONGC is the country’s largest oil exploration and production company, accounting for over 77% of crude production. Tata Chemicals, with diversified salt-pulses-industrial chemicals-fertilizer business portfolio, was part of the $100bn Tata conglomerate.
($1 = €0.78)
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