Nagarjuna Oil Corporation Ltd (NOCL) is likely to take on a new partner to implement the 12-million tonne refinery coming up in Tamil Nadu, near Cuddalore.

State-owned oil marketing companies are conducting a due diligence to take a stake in the project, expected to be commissioned in April-July 2014 when 6 million tonnes of refining capacity will go on stream in the first phase. Work is also on to double the capacity in the next two years.

At least two PSUs, IndianOil and HPCL, are considering taking stake in NOCL. “There is a proposal. We are evaluating it,” HPCL Chairman and Managing Director S. Roy Choudhury told Business Line .

Asked if HPCL would be interested in holding management control in NOCL, Choudhury said that time was not ripe yet to deliberate on such issues.

While official confirmation was not available from IndianOil, sources say the oil major, which is on expansion mode, has expressed interest in the proposal and is now carrying out due diligence.

IOC, sources suggest, was offered a minority stake in the project in 2002. This time round, the company has emphasised that it would be interested if offered 50 per cent interest and management control. While confirmation is not available from NOCL, sources in the know said that apart from PSUs, some foreign companies are also keen to pick up a stake in the refining project.

The decision to expand the capacity was taken, on advice from Engineers India Ltd (EIL) following the damage caused by Cyclone Thane in December last year.

The expansion will help improve the viability of the refinery.

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