21 November 2012 06:53 [Source: ICIS news]
KOLKATA (ICIS)--India’s Oil and Natural Gas Corporation Limited (ONGC) and GAIL India Limited will only be offered minority equity stakes in the $1bn (€780m) petrochemical project to be constructed by a joint venture of Korea’s LG Chem and Bharat Petroleum Corporation Limited (BPCL), a senior Indian official said on Wednesday.
“Both ONGC and GAIL have communicated to BPCL management seeking equity stake in the petrochemical project to be implemented in southern Indian port town of ?xml:namespace>
“Both BPCL and LG Chemicals were principal promoters of the project. LG Chemical as the lead promoter would maintain a 51% holding the project. Hence any minority stake that may be offered to ONGC and GAIL would have to come from 49% held by BPCL,” he said.
“At the same time, for BPCL to maintain its status as a principal promoter, the combined equity holding of ONGC and GAIL, once approved by the board of the LG-BPCL joint venture, shall not exceed that of BPCL,” the official added.
Elaborating on the petchem project, a BPCL official said that construction would be dovetailed with the progress of the $2.53bn expansion of BPCL’s existing refinery from 9.5m tonne/year to 15.5m tonne/year.
While the expanded capacity of the refinery would be made operational in 2015-16, construction of the petrochemical plant would be completed by December 2015 and commissioned in March 2016 to ensure efficient synergies between the refinery and the petrochemical units, the official said.
The petrochemical plant - incorporating a fluid catalytic cracker which would produce 500,000 tonne/year of propylene - would mark BPCL’s foray into the petrochemical business.
It would also include production units for value added products like acrylic acid, currently not produced in
Oil exploration and producer ONGC, gas transportation and oil infrastructure provider GAIL India Limited and refiner-marketer BPCL are all Indian government majority-owned companies operating in upstream and downstream oil sectors.
LG Chem is an integrated South Korean chemical company that manufactures a wide range of products from petrochemicals to high-value added plastics and high performance industrial materials.
($1 = €0.78)
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