October 2009
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Petronet to buy 10% in Dahej project

Petronet LNG is all set to pick up a 10 per cent equity stake in ONGC Petro Additions Ltd (Opal). The ONGC-promoted Opal is setting up a Rs 12,440-crore petrochemical complex in a special economic zone (SEZ) at Dahej. The deal size is estimated to be about Rs 400 crore, with the project having a debt-equity ratio of 2.55:1, according to sources.

Petronet LNG MD & CEO P Dasgupta said: “We have got approval from the board to pick up a 10 per cent stake in Opal.”

ONGC holds a controlling stake of 26 per cent in Opal, Gas Authority of India Ltd holds 19 per cent and Gujarat State Petroleum Corporation has a 5 per cent equity stake. OPAL is aiming to hit the capital markets in 2011 by offering 20 per cent equity.

The JV firm has been in talks with overseas firms like Ineos, Mitsui, Mitsubishi Chemicals and Japan Polypropylene Corporation for equity tie-up, sources added.

“Petronet had earlier shown interest in picking up a 5 per cent equity stake, but we have offered them another 5 per cent,” an ONGC official said.

Petronet will not directly supply gas to OPAL, but through ONGC’s Rs 1,000-crore C2+ extraction unit which will act as a feedstock provider.

“Petronet will supply 5 million metric tones per annum (MMTPA) of rich LNG to the C2+ extraction unit. Of this, 0.7 MMTPA of C2, C3 and C4 will be extracted and further supplied to OPAL. The remaining gas will be returned to Petronet,” an official close to the development said.

OPAL’s petrochemical complex will come up on 500 hectares in the SEZ and has already awarded a $1.43-billion contract to the consortium of Linde AG, Germany, and Samsung Engineering, Korea, for the dual-feed cracker project. This will have a capacity of 11 lakh tonnes per annum (TPA), of which 3 lakh TPA will be sold by OPAL in the open market.

OPAL’s petrochemical complex will be commissioned in 2011-12 and is expected to have an annual capacity of 1.1 million tonnes of ethylene, 340,000 tonnes of propylene, 135,000 tonnes of benzene and 95,000 tons of butadiene.

Meanwhile, ONGC has completed 98 per cent work of its C2+ extraction unit which will come up adjacent to the petrochemical complex over 55 acres.

Source: Business Standard

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