ONGC eyes IPO money for petrochem plant

ONGC eyes IPO money for petrochem plant

New Delhi: Oil and Natural Gas Corp (ONGC) is looking at an initial public offering (IPO) of its subsidiary that is building a Rs13,600-crore petrochemical plant at Dahej, closer to project completion in 2012.

ONGC is considering selling up to 25% of the equity shares in ONGC Petro-additions Ltd (OPaL), the special purpose vehicle formed for setting up the petrochemical complex at Dahej SEZ, a senior company official said.

It plans to give 19% equity stake in OPaL to state-run gas utility GAIL India, while another 25% interest may be offered to Petronet LNG and Bharat Petroleum or a strategic partner.

“We are not considering the IPO right now. The offering may happen in 2010-11 or even closer to the project completion in 2012," the official said.

ONGC holds 26% stake in OPaL and 5% is with Gujarat State Petroleum Corp (GSPC).

OPaL will use C2-C3 (ethane and propane) compounds extracted from imported liquefied natural gas (LNG) to make polymers at the proposed plant.

The 1,100-crore plant to extract C2-C3 from the LNG that Petronet imports from Qatar would be ready by year-end but the petrochemical project would not come up before 2012.

ONGC would in the interim period sell C2-C3 compounds to companies like Reliance-owned IPCL or even export, he said.

While GAIL had sought equity in OPaL as it already had a presence in petrochemical business, Petronet may be offered an equity as it imports five million tons a year of rich-LNG (gas containing C2-C3 compounds).