ONGC-controlled Mangalore Refinery and Petrochemicals Ltd plans to bid for acquiring West Bengal Government's stake in the ailing Haldia Petrochemicals Ltd.

According to the MRPL Managing Director, Mr U.K. Basu, the company had an informal discussion in this regard during a meeting with HPL officials in Kolkata. The company is planning to make a formal submission in this regard to the State Chief Minister, Ms Mamata Banerjee.

Supplying naphtha

The State Government has already expressed its intention to off-load the 43 per cent stake in the joint sector company through a transparent pricing mechanism. MRPL is also exploring options to enter the petrochem sector as a forward integration to its refining activity.

The Rs 44,000-crore integrated refinery - which is on the verge of completion of a Rs 15,000-crore capacity expansion project — is also considering a proposal from HPL for contract sourcing of naphtha. HPL currently imports bulk of its naphtha requirements.

“We are considering a proposal for sales of naphtha, through annual contract, to HPL,” Mr Basu told Business Line . Apparently, the Mangalore-based refinery is agreeable to supply one parcel of 25,000 tonne each a month to the naphtha-based petrochemicals project in West Bengal. The terms and conditions of the contract are yet to be decided.

Contracted domestic purchase of naphtha should help HPL to take safeguard against foreign exchange volatility as well as assured supply of feedstock.

The joint sector company has reportedly eroded nearly half of its networth at the close of the last fiscal. To make the situation difficult, both the lead promoters: the State Government and The Chatterjee Group (TCG) are currently engaged in a legal battle in the International Court of Arbitration (ICA) in Paris for control over disputed 15.5 crore shares.

Indian Oil owns nine per cent stake in the project.

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