ONGC joint venture planning IPO in 2012

Dahej (Gujarat), March 15 (IANS) ONGC Petro-additions Ltd (OPaL), a joint venture promoted by Oil and Natural Gas Commission (ONGC), Gas Authority of India Ltd (GAIL) and Gujarat State Petroleum Corporation (GSPC), is slated to hit the capital market in 2012 with an initial public offering (IPO) for the Rs.12,440-crore mega petrochemical complex coming up here.

According to ONGC chairman and managing director R.S.Sharma, OPaL may go in for the IPO just before the completion of the project targeted for December 2012.

"Petronet LNG Ltd (PLL) is also set to pick up a stake of 10 per cent in The project as a strategic partner. We have already achieved financial closure for the estimated project cost of Rs.12,440 crore. Its debt-equity ratio will be 70:30. Debt has been tied up with a consortium of 26 banks last year for Rs.8,706 crore with an interest rate of 12 percent," he added.

ONGC holds 26 per cent, GAIL 19 per cent and GSPC 5 per cent in OPaL, which is billed as India's largest dual feed cracket unit plant with a ethylene cracking capacity of 1.1 million metric tones per annum (MMTA). It has a signed MoU with ONGC for supply of naphtha and C2C3 feedstock (ethylene, toluene etc) from its Hazira and Uran plants.

Including all its products, the petrochemical project will have a capacity of 1.9 MMTA inclusive of all products and generate Rs. 12,000 crore revenue yearly. The dual-feed cracker job has been awarded to a combine of Germany's Linde Group and Samsung Corporation.

OPaL's product line up includes polypropylene for plastic producers, and butadiene etc for other downstream industrial applications. 50 percent of the products would be exported.

The OPaL petrochemical plant is coming up in the 1,700 hectare Dahej special economic zone (SEZ), which is promoted by the ONGC and the Gujarat Industrial Development Corporation (GIDC).

Spread over 500 hectares in the export oriented multi-product SEZ, the OPaL plant and its downstream associates are expected to generate about 15,000 jobs, both directly and indirectly, according to its CEO P.K.Johri.

"We expect an additional investment of Rs.2,000 crore from a dozen or so downstream projects  who have evinced interest in OPaL feedstock," he added.