Kuwait National Petroleum Company, Qatar Petroleum and Emirates National Oil Company are among a clutch of oil companies in Western Asia which have evinced interest in a 26% stake in ONGC’s soon-to-be-commissioned R6,000-crore petrochemicals complex in Mangalore, according to sources privy to the development.
The state-run exploration company plans to hold 46% in the petrochemicals venture ONGC Mangalore Petrochemicals (OMPL). Another 3% is to be held by ONGC’s subsidiary Mangalore Refinery and Petrochemicals (MRPL). The plan is to offer a 25% stake in OMPL to the public and find a partner/s for the remaining 26% stake.
OMPL was incorporated in December 2006. Earlier this year, ONGC had mandated ICICI Securities and Deloitte Touche Tohmatsu to find investors for the aromatic complex designed to produce 0.9 million tonnes per annum (mtpa) of paraxylene and 0.3 mtpa of benzene. Feedstock for the complex would be supplied by the MRPL refinery situated adjacent to OMPL.
When contacted, bankers handling the deal refused to divulge the valuation of the OMPL stake on offer.
“We have seen a strong response to the expression of interest (EoI) floated to sell stake in OMPL. We expect to bring in investors by the end of this financial year by when we should also kick off operations at OMPL,” said an ONGC official, confirming the development. The official refused to comment on the valuation.
ONGC chairman Sudhir Vasudeva had said at MRPL’s September AGM that he expected OMPL to ship its first products by January-end. The complex is coming up in 442 acres in the Mangalore Special Economic Zone.
A deal with ONGC for the OMPL stake will come in handy for oil suppliers in West Asia looking at closer links in large Asian markets, with the US markets reducing its dependence on crude oil imports.
As for ONGC, the idea is not just to raise funds but also induct strategic investors with knowledge in the oil and gas sector into the venture.
Apart from OMPL, ONGC is promoting another petrochemicals plant at Dahej in Gujarat. The Dahej plant is being developed through a joint venture company ONGC Petro-additions Limited (OPaL) in which ONGC holds 26%. Like in the case of OMPL, ONGC is also looking to sell stake in the project through a strategic sale as well as an IPO. Saudi’s Aramco, the world’s largest oil company, is among investors who have expressed interest in the project.
Aggregate demand for petrochemicals in