Haldia Petrochemicals (HPL) is seems poised to acquire Larsen & Toubro's 51% stake in HPL Cogeneration. HPL Cogeneration is a 51:49 JV between L&T and HPL and it runs a 160 mw power station in Haldia. The West Bengal government with a 51.67% stake in HPL, has given the HPL board the nod of approval for the acquisition.
Approximately Rs 150-200 crores will be shelled out by HPL to buy out L&T's majority stake in what could be an all-cash deal. HPL Cogeneration currently supplies power to run HPL's naphtha cracker plant and its associated units.
Being a naphtha-based facility, power produced by HPL Cogeneration is relatively expensive. However, the recent prospect of natural gas supplies by Reliance Industries to Haldia, has made feasible the possibility of gas-based captive generation for HPL. The switch from naphtha-fired to gas-fired technology by HPL Cogeneration is perceived as a simple process.