Ministry clears MRPL revival of Spic Petro

31-Oct-05

The oil ministry has cleared an ONGC proposal to pick up majority stake in Spic Petrochemicals Ltd (SPL), promoted by the Southern Petrochemicals Industries Corporation Ltd (SPIC). ONGC was keenly interested in reviving the project, which was suspended for over a decade due to a dispute between Spic and the Chennai Petroleum Corporation Ltd (CPCL). Though the two sides have reached an out-of-court settlement, Spic, a sick company itself, has been unable to revive the project and has been looking for a new joint venture partner. The project was being developed to manufacture purified terephthalic acid (PTA) and polyester filament yarn (PFY). When the project was stalled, the PFY plant was more than 70% complete and the PTA plant had progressed close to 15%. ONGC has conducted an initial feedback about the feasibility of reviving the project and will make the equity investment through its wholly-owned subsidiary MRPL. As per the initial plans, an additional Rs 200 crore will be required to commence the revival work on the project. Total investments would go up to Rs 2,000 crore from the original estimate of Rs 1,400-1,500 crore, to make the plant fully operational.