Kuwait Petroleum Corp in talks with IOC for buying a stake in Paradip refinery and a proposed petrochemical complex

11-Mar-14

Kuwait Petroleum Corp (KPC) is in talks with Indian Oil Corp (IOC) for buying a stake in the state-owned firm's R29,777-crore Paradip refinery and a proposed petrochemical complex. IOC, which will start commissioning the 15 mln tpa refinery at Paradip in Odisha in June, is willing to offer no more than a 26% stake in the project. The refinery has been built to process at least 40% of toughest, heaviest and the dirtiest crudes like Maya of Mexico which are cheaper than the cleaner and easier varieties available from the Middle East. The refinery will have a Nelson Complexity Index of 13, the highest in the world. IOC plans to set up a Rs 3,150 crore Polypropylene unit adjacent to the refinery in 39 months, at an investment outlay of about Rs 3,150 crore IOC wants to closely examine conditions that Kuwait may attach for equity participation. "If the equity participation is subject to the refinery buying all or most of its crude oil requirement from Kuwait, that will be a big no-no from us as we don't want to tie ourself down to just one supplier," as per a source. The project will have to be spun off into a separate company if Kuwait is to participate in it.