Mitsui, Mitsubishi eye stakes in new Indian unit

Mitsui, Mitsubishi eye stakes in new Indian unit

By Reuters

New Delhi: Japanese trading houses Mitsui & Co and Mitsubishi Corp may take stakes in a aromatic unit planned planned by India’s Mangalore Refinery and Petrochemicals Ltd, a senior MRPL official said on 26 September.

The proposed Rs48.52 billion ($1.22 billion) complex is to be built by a new venture, ONGC Mangalore Petrochemicals Ltd, and aims to meet demand for paraxylene.

State refiner MRPL will own 3% of the new firm, while its parent company, explorer Oil and Natural Gas Corp will invest a bulk of the funds for a 46% stake. “We are talking to both Mitsui and Mitsubishi for participation in the project. They have said they will come back to us after talking to their management," MRPL managing director R. Rajamani said.

Paraxylene is used to make polyester and plastics. A final decision on including further partners is expected to be taken within six months, said Rajamani, adding the two Japanese firms had expressed an interest in buying the proposed plant’s entire paraxylene output.

The unit will produce about 900,000 tonnes of paraxylene a year from 2010 using naphtha produced at MRPL’s 193,800 barrels a day refinery in southern India. “Our naphtha exports will substantially reduce once the new project comes on stream," Rajamani said. MRPL averages naphtha exports of 720,000 tonnes a year at the moment.

It plans to expand capacity of its refinery to 300,000 bpd by end-2010.