Petroleum Minister opposes ONGC petrochem project

08-Aug-05

The Rs 25,000-crore project of Oil and Natural Gas Corporation (ONGC) proposed to be set up in Mangalore seems to have halted in its tracks. India's Petroleum Minister has once again raised an objection to ONGC's petrochem project, despite approval from the PMO. The Minister has opposed the project on the grounds that a mix of power and petrochemical projects was against ONGC's "core competency." The State Government had already signed a Memorandum of Understanding with the ONGC and the Kanara Chamber of Commerce for the project, which envisages setting up of a LNG terminal, power generation plant and a mega petrochemical complex. The project, as cleared by the PMO, was to be executed through its subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL). However, it seems that the objection can be triggered by the fact that the Ministry does not want ONGC to invest so much in Karnataka and it does not want a power plant. Not having a power plant renders the entire project as useless as the power plant complements the rest of the projects, including the special economic zone and the petrochemical complex.