ONGC To Offload 26% Of KRPL To Public

ONGC has decided to come out with a public issue later this fiscal to part-finance its Rs 18,000-crore refinery-cum-petrochemical project. The 15-million-tonne refinery complex will be built to cater to the demand for high-grade fuel in the European and other Western markets. The project will be developed through a separate SPV, Kakinada Refinery & Petrochemicals (KRPL). IL&FS, which has acquired a 26 per cent stake in the SPV, will exit the project and offload its stake to the public. The company now plans to double the refinery within an SEZ that would be developed in collaboration with Andhra Pradesh Industrial Development Corp and Kakinada Sea Ports. While ONGC would have a majority stake and management control, the proposed JV would be a non-PSU joint venture. Based on the business model of Reliance Petroleum''s Jamnagar refinery, the Kakinada refinery too would use imported crude and produce high-margin Euro-III and Euro-IV petroleum products. Earlier, EIL had done a feasibility study to set up a 7.5-MTPA refinery in Kakinada with an investment of Rs 12,000 crore. The earlier EIL feasibility report was not encouraging. EIL is expected to submit the feasibility report by June. The works on the project is expected to start by August 2007.