With a view to maintain focus on its core competency of exploration and production, ONGC has dissected its Rs 25,000 crore mega project for liquefied natural gas, power and petrochemicals at Mangalore for implementation by other state-run firms.
ONGC had planned to invest Rs 25,000 crore in the Mangalore project which will include LNG imports, its shipping and transportation, an LNG jetty and a regasification plant, a C-2/C-3 extraction plant, a 1445 MW power plant and a basic petrochemical complex, including a dual feed cracker and associated facilities. ONGC signed an MoU with Karnataka on August 30, 2004 for the various projects envisaged in the MoU. However,, the ministry has claimed that the MoU was signed by ONGC on behalf of other state-run oil companies.
The ministry has directed ONGC that the terminal be taken up by its subsidiary Mangalore Refinery and Petrochemicals Ltd. (MRPL) in association with Hindustan Petroleum Corp Ltd (HPCL). The ministry has also directed that MRPL should go alone for petrochemical project. The Karnataka government has been advised to identify a suitable partner for implementing the power project, in which ONGC will hold equity of not more than 26%.
Karnataka government, had favoured the earlier mega project by ONGC, is of the opinion that there could be implementation delays if projects are subdivided between various agencies, leading to a lack of synergies.