India offers stakes in petrochemical plants to Kuwait

India offers stakes in petrochemical plants to Kuwait
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First Published: Wed, Mar 31 2010. 11 20 AM IST
Updated: Wed, Mar 31 2010. 11 20 AM IST
Cancun (Mexico): Moving beyond supplier-buyer relationship, India has offered Kuwait a stake in Oil and Natural Gas Corp’s Rs12,440-crore petrochemical plant at Dahej in Gujarat and Indian Oil Corp´s (IOC) proposed chemical unit at Paradip.
The oil-rich nation’s national oil firm Kuwait Petroleum Corp has time and again spurned offers for stake in Indian refinery projects as it, like its Saudi counterpart Saudi Aramco, wanted auto fuel distribution rights— a proposition not possible considering only state-owned firms qualify for government subsidies.
Petroleum minister Murli Deora met his Kuwati counterpart Sheikh Ahmad Al-Abdullah Al-Ahmad Al-Sabah on the sidelines of the XII International Energy Forum on Tuesday and offered a stake in the mega petrochemical plants being built on the west and east coast, said Sunil Jain, joint secretary in his ministry.
ONGC is keen to get an overseas major who can either bring technology or marketing support for its Dahej plant that would be built by February 2012.
ONGC holds 26% stake in ONGC Petro-additions Ltd, the special purpose vehicle (SPV) formed for setting up the chemical complex at the Dahej special economic zone (SEZ). Five per cent stake is with the Gujarat State Petroleum Corp (GSPC) and state-owned gas utility GAIL India has 19%. A foreign firm may be given 20-25%
“Kuwait said they would like to discuss the opportunity further,” Jain said.
The Dahej petrochemical complex would comprise of global scale cracker and downstream polymer plants. OPaL will use C2-C3 (ethane and propane) compounds extracted from imported liquefied natural gas (LNG) to make polymers. ONGC is looking for someone who can sell the polymers the plant makes.
The plant would produce 1.1 million tonnes of ethylene, 340,000 tonnes of propylene, 135,000 tonnes of benzene and 95,000 tonnes of butadiene per annum. These products are used as source materials in the plastics industry.
KPC was also offered a stake in the 1-million tons petrochemical plant that was split from the Rs29,777-crore refinery at Paradip for building in future, he said.
The chemical plant would be build after the 15 million-tons-a-year refinery is commissioned in 2012 as IOC faced cash crunch in view of selling subsidised fuel.
IOC has been for long looking at equity partners in companies like Saudi Aramco and Kuwait Petroleum, who can supply crude oil to the Paradip refinery project in Orissa.
However, since the two declined offers, with the Saudi company doing so as late as last month, the petrochemical plant is now being offered.
Jain said Kuwait supplies 10% of India’s crude needs and New Delhi also expressed interest in setting up a fertilizer plant in the Gulf nation if it was allocated natural gas for the plant.
“Kuwait mentioned that it was short in gas and all of the gas that it produced was being used for domestic industries,” he said.
New Delhi was looking at Kuwait and other oil-rich nations in the Gulf region for meeting crude oil demand of new refinery plants. India’s refining capacity is to increase from 180 million tons to 250 million tons by 2012, he said.
Prime Minister Manmohan Singh’s visit to Saudi Arabia had yielded an assurance from the world’s largest oil exporter for increasing crude supplies from 25.5 million tons to 40 million tons a year by 2012.
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First Published: Wed, Mar 31 2010. 11 20 AM IST