The Hindu Business Line : Turkey refinery: IOC may tie up with KMG, ENI

Snapshot
The project has received the provisional approval from the Energy Market Regulatory Authority of Turkey in May.
IOC in talks with KazMunayGas and ENI for possible equity participation in the refinery.

Pratim Ranjan Bose

Kolkata, Aug. 10

IndianOil Corporation may rope in KazMunayGas (KMG) of Kazakhstan and ENI of Italy as equity partner(s) in the proposed 15-million-tonne (mt) refinery in Turkey. According to preliminary estimates, the project will cost $4.9 billion or approximately Rs 20,000 crore.

IndianOil has already formed 51:49 joint venture with Calik Holding of Turkey for setting up the export-oriented refinery at the port city of Ceyhan. The project has received the provisional approval from the Energy Market Regulatory Authority of Turkey in May this year.

“We are in discussion with KazMunayGas and ENI for possible equity participation in the refinery,” an IOC official said, adding that issues related to shareholding pattern were yet to be firmed up.

Partners

KazMunayGas is the national oil company of Kazakhstan and was previously in the race for setting up the refinery. The company has interests across the oil value chain and produced 178 million barrels of crude oil a day in 2005.

ENI is a global energy major with existing business interests with IOC in Turkey. The company has already agreed to offer 12.5 per cent participatory stake to IOC in the $1.5- billion crude pipeline — Trans Anatolian Pipeline (TAPCO) — from Northern Black Sea city Samsun to Ceyhan.

The 550-km pipeline will transport crude oil to be refined at the proposed IOC refinery at Ceyhan. Calik group is a co-promoter of the pipeline project.

Feasibility study

While it is not clear whether both KMG and ENI will participate in the refinery, IOC sources said that considering the huge investments required as well as to ensure greater market access, more partners — preferably with a participatory stake — may be included in the project.

Meanwhile, IOC-Calik combine has floated the request for proposal (RFP) for commissioning the feasibility report for the proposed refinery. According to sources, five international consultants, including UOP, Shell Global Solutions and Lurgi have joined the race.

“The bidding process for commissioning study is expected to be over in next three months. The feasibility report will be prepared in six months from awarding the contract,” the official said.

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