The Hindu Business Line : Korean, Japanese cos eye equity stake in MRPL project

Refinery expansion
The petrochemicals complex is to produce petrochemical building blocks — paraxylene and benzene — removing the freight handicap of southern consumers.
With the upgradation of MRPL, the new refinery configuration will enable processing of higher proportion of low-cost sour and heavy crude leading to better margins, the sources said.

New Delhi , July 22

Korean and Japanese trading and investment companies have envisaged interest in becoming equity partners with Oil and Natural Gas Corporation (ONGC) for its petrochemicals complex at Mangalore.

"The foreign companies are looking for good investment opportunity in India, and MRPL is currently evaluating these proposals and firming up its plans," a company official said.

ONGC's subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL) is implementing the petrochemical project. Sources, however, refrained from giving out details on the kind of participation these companies were looking for in the project.

EoIs floated

MRPL had floated an expression of interest (EoI) to know the demand for speciality products such as paraxylene and propylene about six months ago. The company proposes to produce these products by 2010 from its existing refinery, once it is upgraded to 15 million tonnes per annum (MTPA).

In response to the EoI, companies from these two Asian countries not only showed interest in the products and offered to provide technological support to MRPL but also expressed interest in becoming stakeholders in the petrochemicals project. ONGC is also in talks with Qatar Investment Authority for equity participation in the Mangalore liquefied natural gas (LNG) project to be set up as part of the petrochemicals complex.

Capacity expansion

While the capacity of the existing refinery is under expansion from 9.69 MTPA to 15 MTPA at an expenditure of around Rs 8,000 crore, the petrochemicals complex is to produce petrochemical building blocks — paraxylene and benzene — removing the freight handicap of southern consumers.

With the upgradation of MRPL, the new refinery configuration will enable processing of higher proportion of low-cost sour and heavy crude leading to better margins, the sources said.

A combined investment of around Rs 12,900 crore has been approved by ONGC for the refinery upgradation and aromatics (petrochemicals) complex.

The naphtha generated in the MRPL refinery will be upgraded to paraxylene in this aromatics complex.

According to ONGC sources, the company plans to invest more than Rs 35,000 crore for integrated operations in midstream and downstream such as refining, petrochemicals, power and LNG, at its Mangalore SEZ, which is likely to be the first petroleum, chemicals and petrochemicals investment region of the country.

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