State-run oil marketer Bharat Petroleum Corporation (BPCL), which is setting up its first propylene unit in Kochi, said it is ready to offer 51 per cent stake in the Rs 6,000-crore project to its Korean joint venture partner LG Chemicals.

“We have already inked an MoU with LG Chemicals for this project. They are looking at 51 per cent stake in the joint venture and we are open to that. The JV company will be in place by December or January and the plant will be commissioned by the end of FY17,” BPCL Finance Director S. Varadarajan told PTI here over the weekend.

He said the propylene plant is part of the company’s proposed petrochemicals complex planned at Ambalamugal near Kochi, where it also has a 9.5 million tonne oil refinery.

On September 14, BPCL Chairman and Managing Director R. K. Singh had inked an MoU with Kerala Chief Minister Oommen Chandy at the Emerging Kerala investor summit in Kochi that attracted Rs 2.5 trillion worth proposals, for Rs 20,000-crore investment in the State.

Varadarajan said this is the single largest investment by the company so far and involves expansion of the Kochi Refinery capacity to 15.5 million tonnes per annum by FY17 from 9.5 million tonne currently. The remaining Rs 6,000 crore will go into the greenfield petrochemicals complex.

When asked about the details of tax benefits that Kerala has offered, Varadarajan said, “BPCL will be cumulatively getting Rs 7,500 crore in tax deferments over 15 years since commissioning of the both plants. This works out to around Rs 500 crore annually. But from the 16th year onwards, we will have start paying back this to the State. So this practically is a loan from the State.”

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