18 September 2013 08:08 [Source: ICIS news]
By Ajoy K Das
KOLKATA (ICIS)--Hindustan Petroleum Corporation Limited (HPCL) will approach Total and BP offering partnership for its $6bn (€4.5bn) refinery cum petrochemical complex in Rajasthan, an official in India’s Ministry of Petroleum and Natural Gas said on Wednesday.
The approach to Total for partnership in the project to be based in the desert province of Rajasthan will be based on HPCL’s past relationship with the French company, the official said.
While Total was partnering HPCL in construction of an underground cavern for storage of liquefied petroleum gas (LPG) in Mangalore in a southern India, the association with the French major goes back to 2009 for a refinery cum petrochemical project in Vishakhapatnam in southern India which did not take off, the official said.
Though the Vishakhapatnam project was still under consideration of HPCL, the Rajasthan refinery cum petrochemical project could interest Total since the latter was much closer to take-off, he added.
BP already has business exposure in the Indian oil and gas sectors through its collaboration with Reliance Industries Limited (RIL) with committed investments and the company was increasing focus outside Europe, the official said.
Earlier this year, BP held its first board meeting in India to explore business opportunities, the official added.
India’s Cabinet Committee for Economic Affairs (CCEA), the apex government decision making body, was expected to approve HPCL’s Rajasthan project within the next one week and HPCL planned to commence ground-breaking operations at the project site by the end of this month.
The 9m tonne/year refinery cum petrochemical complex will source 4.5m tonne/year of crude from Mangala oilfields operated by Cairns India and the balanced feedstock will be imported.
HPCL would implement the project through a special purpose vehicle holding 76% of the equity and 24% would be held by the provincial government of Rajasthan.
However, equity stake to the joint venture partner would be offered through dilution of HPCL’s 76% equity subject to latter maintaining a minimum of 51% equity interest in the project, the official said.
The crude sourced from Cairn’s oilfields was of high hydrogen content and helpful in petrochemical distillation for the Rajasthan project, the first petrochemical plant in the country to be based on domestic crude, he added.
($1 = €0.75)
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