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Monday, Oct 21, 2002

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Nagarjuna's refinery in TN close to financial closure

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THE Nagarjuna group, which is in the process of establishing Rs 3,000-crore, 6-million-tonne refinery project in Cuddalore in Tamil Nadu, has announced that it is in the process of achieving "financial closure" shortly.

A senior company official told Business Line that eventful discussions were under way with prospective alliance partners and the company expected to achieve financial closure in the next two months.

For the refinery project, the Nagarjuna group has already committed Rs 1,300 crore besides incurring an expenditure of Rs 800 crore as on June 2002. The group flagship company, Nagarjuna Fertilisers and Chemicals Ltd, holds 51 per cent of the total equity in the project, 26 per cent is held by Oman Oil and 2 per cent by TIDCO. The company is in the process of roping in a strategic partner for the balance 18 per cent stake.

It may be recalled that Indian Oil Corporation (IOC), which had earlier offered equity, decided against investment in the new project about a year ago. Following that development, the company has embarked on the process of negotiating with other strategic alliance partners for the 18 per cent stake, the company official said.

Further, the company, referring to some recent reports about delay in the project due to financial closure, said all the regulatory approvals, including environmental clearances from the Ministry of Environment and Forests for the refinery and the marine terminal facilities had been obtained.

The contracts for purchase and transportation of the Mobil refinery, engineering services, procurement, construction management, licence agreements with process licensors for all services including crude supply, export product off-take have been awarded and agreements for technical services and operations and maintenance finalised.

The official said the project had achieved progress of about 30 per cent, including dismantling and transshipment of the Mobil refinery from Germany as well as related engineering services.

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