The Hindu Business Line : IOC may include third partner in Turkey refinery

Integrated refinery
Project may require close to $1.5-billion equity investment
Final approval from Turkey authority awaits detailed feasibility report
Company expecting finalisation of the report in the next nine months.

Kolkata June 2 IndianOil may include third partner in the proposed 15-million-tonne integrated refinery in Turkey.

The Indian refiner has formed a 51:49 joint venture with Calik Holding of Turkey to set up the export-oriented project at the port city of Ceyhan in Southern Turkey at an approximate cost of $4.9 billion.

"Considering the huge investments required in the project as well as to ensure greater market access, we (IOC-Calik) may settle for a third partner — preferably with a participatory stake — in the project," IndianOil sources said.

According to preliminary assessment, the project may require close to $1.5-billion equity investment at the industry benchmark of 70:30 debt-equity for refinery projects.

Preliminary nod

The Energy Market Regulatory Authority of Turkey has recently granted a preliminary approval to IOC-Calik combine to set up the project.

The final approval will be available once the detailed feasibility report (DFR) is submitted by the end of this fiscal or early 2008-09.

The refinery will be fed by oil transported by $1.5-billion oil pipeline — Trans Anatolian Pipeline Project — from the Turkish Northern Black Sea city Samsun to Ceyhan.

IOC has secured 12.5 per cent participatory interest in the pipeline, promoted by ENI of Italy and Calik.

Feasibility Report

Mr B.M. Bansal, Director (Business Development) of IOC told Business Line, "We are open to the possibility of inclusion of more partners."

He, however, stressed that it was too early for exploring any such possibility as the final cost estimate and other details would be ready once the detailed feasibility report is finalised. "We have not initiated any discussion with any other prospective investors in this regard, so far," he said.

IOC is expecting finalisation of the report in the next nine months.

"We are now gearing up to appoint the consultant for launching the feasibility report. Hopefully, the process will be over in the next three months. The DFR is expected to be ready in six months from appointment of the consultant," Mr Bansal said.

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