Kuwait Petroleum Corp keen to buy stake in ONGC petchem projects

Kuwait Petroleum Corp has shown interest in buying 26 per cent stake in ONGC's Rs 21,396 crore petrochemical plant at Dahej, Gujarat, as well as the state-owned firm's Rs 5,750 crore chemical plant at Mangalore.

"Kuwait is keen on taking a stake in the petrochemical plants of ONGC... They have envisaged interest in both of them," an oil ministry official said after the two companies signed a MoU on sidelines of the Petrotech conference in Greater Noida. ONGC is keen to get an overseas major who can either bring in technology or marketing support for its Dahej plant that would be built by the year-end.

ONGC holds 26 per cent stake in ONGC Petro-additions Ltd, the special purpose vehicle (SPV) formed for setting up the chemical complex at the Dahej special economic zone (SEZ). Five per cent stake is with the Gujarat State Petroleum Corp (GSPC) and state-owned gas utility GAIL India has 15.5 percent.

The remaining 53.5 per cent equity valued at Rs 3,434.05 crore is yet to be tied up. Also on Kuwait's radar is a stake in the petrochemical plant ONGC is building at Mangalore and Bharat Petroleum Corp Ltd's (BPCL) proposed chemical unit at Kochi in Kerala. The Gulf nation's national oil company KPC has held several rounds of discussions with ONGC which has now culminated into a MoU. KPC CEO Nizar al-Adsani said his company was interested in downstream opportunities in India and is looking at "several opportunities".

Kuwait is India's third largest supplier of crude oil, with supply of 17.70 million tonne crude oil in 2011-12. ONGC holds 46 per cent stake in ONGC Mangalore Petrochemicals Ltd (OMPL) which is building the aromatic complex at Mangalore. Mangalore Refinery and Petrochemicals Ltd (MRPL) holds 3 per cent stake in the project that will produce 905,000 MT of para-xylene and 270,000 MT of benzene utilising the naphtha and other streams from MRPL.

During talks with the visiting Kuwaiti delegation, Oil Minister M Veerappa Moily invited Kuwait investment in the LNG terminals coming up on east and west coasts as well as offered capacity in the strategic oil storages India is building at Visakhapatnam in Andhra Pradesh and Mangalore and Padur in Karanataka.