KOLKATA (ICIS)--Indian Oil Corporation Limited (IOC) is in partnership talks with Hindustan Petroleum Corporation Limited (HPCL) for a $8bn refinery cum petrochemical complex project planned in southern Indian province of Andhra Pradesh, an IOC official said on Wednesday.
Once talks are finalized and IOC’s equity participation level agreed, HPCL will make necessary changes in the feasibility report of its 15m tonne/year refinery and integrated petrochemical complex, incorporating IOC’s priorities, the official said.
Changes in the configuration of the petrochemical plant will also be considered since IOC was keen on making it an export-oriented plant with a focus on markets like China, he added.
The participation of IOC, the country’s largest oil refiner and marketer, in the project was critical in implementation of the Andhra Pradesh project since HPCL’s capital expenditure capacity is limited, the official said.
HPCL was simultaneously implementing a $6.87bn grass-root refinery on its own in the central desert province of Rajasthan, the official said.
IOC’s interest in the southern Indian project follows after its successful bid for 40% equity stake in Haldia Petrochemicals Limited (HPL) in West Bengal has come unstuck as result of legal wrangling between the West Bengal government and the TCG group, the other principal shareholders in HPL.
IOC, which emerged as a sole successful bidder in October 2013 for West Bengal government’s 40% equity in HPL in an auction, has sought refund of the $3m it had paid as earnest money to the government, the official said.
HPL runs a petrochemical complex at the port town of Haldia in eastern Indian province of West Bengal with a nameplate naphtha cracking capacity of 670,000 tonnes/ year.
The principal promoters of HPL were The Chatterjee Group (TCG) 44.21%, West Bengal government 43.29%.
IOC has an existing holding of 9.62% in HPL while the balance was vested with the Tata Group
HPCL’s refinery cum petrochemical project has been planned as the anchor investment for the Petroleum, Chemicals, Petrochemicals Investments Region (PCPIR) at the Vishakhapatnam-Kakinada region of Andhra Pradesh.