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Archana Chaudhary

Mumbai , Dec. 24

INDIAN Oil Corporation has been offered stake in two Iranian petrochemical projects by the Teheran-based National Petrochemicals Company.

The offer is the result of bilateral talks held earlier this year when the two countries agreed to work towards a package deal. India would buy liquefied natural gas (LNG) from Iran, which would in turn offer Indian companies opportunities in the Iranian upstream sector.

The two companies are expected to sign a memorandum of understanding by this month-end, said a source. "Within four weeks of signing the MoU, a task force will be appointed to study the feasibility of the offers," the source said.

IOC has been offered the option to pick up a stake in the existing polyolefins project comprising olefins, PTA/PET, engineering polymers, aromatics and methanol, in the petrochemicals SEZ at Bandar Imam complex or in an upcoming world-scale greenfield ethylene plant, dubbed Olefins 11, at the Pars SEZ at Bandar Assaluyeh, both situated on the northern coast of the Persian Gulf.

"India is expected to be deficit in polymers in the next two-three years. As of today, Reliance is the only major producer of olefins or light polymers. And after RIL's takeover of IPCL, another olefins manufacturer, picking up a stake in the Iranian projects will work to its advantage," said a senior analyst with an Indian FI.

Indian Oil has lined up a master plan for petrochemicals with an investment of Rs 15,000 crore in Phase-1, mainly through vertical integration with its core refining business, and utilising the streams available at its various refineries, Mr M.S. Ramchandran, Chairman and Managing Director, IOC, had said at the company's analysts' meet earlier this year.

Two major projects under execution are: Production facilities for LAB (linear alkyl benzene) at Gujarat refinery scheduled for completion by June 2004, and PX/PTA (paraxylene/pteripthalic acid) at Panipat expected to be commissioned by May 2005. Both these projects together are estimated to cost about Rs 6,000 crore. Other investments on the anvil at an expenditure of Rs 7,000 crore are: A greenfiled naphtha cracker with downstream polymer complex and a standalone polypropylene unit.

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