ONGC to take a strategic partner in its gas-processing project at Dahej

In the wake of strong equity interest being shown by global players, state-owned Oil and Natural Gas Corporation (ONGC) is likely to take a strategic partner in the second stage of its gas-processing project at Dahej in Gujarat, being implemented at an investment estimated at Rs 13,600 crore. ONGC is implementing the project through a special purpose vehicle- ONGC Petro-additions Ltd (OPaL) and the strategic partner could join as the technology provider or investor, for the project that will be commissioned around mid-2010. Discussions are at a preliminary stage, with ONGC’s equity investment in the project estimated to be limited to Rs 992 crore. The company is weighing the option due to interest shown by global majors, technology providers and financial institutes. Japanese giants Mitsui Chemicals and Mitsubishi Chemical Corporation, Korean players and a Swedish technology provider, are among the companies which have shown interest in taking equity in the project. ONGC is to construct a plant to extract C2-C3 (ethane, propane) from LNG imported by Petronet LNG Ltd from Qatar, which in turn will form the basic feedstock for the petrochemical complex to be built through an SPV. The turnkey contract for the C2-C3 extraction project has been awarded to Toyo Engineering and the plant will be completed by May 31, 2008. Project management Consultant for the project is the UK-based Foster Wheeler Energy Ltd. The complex comprises of 1.1 million tpa ethylene capacity dual feed cracker, along with associated units and polymer plants, to manufacture HDPE, LLDPE, PP and Styrene Butadiene Rubber.