Business

ONGC to borrow $1 b to fund Mangalore project

NEW DELHI: Oil and Natural Gas Corporation Mangalore Petrochemicals Limited (OMPL), a special purpose vehicle to execute the Rs. 6,400-crore aromatic petrochemical complex at Mangalore, has mandated SBI Caps to arrange for funds for the $1.52 billion project. The company plans to borrow around $1 billion to fund the project.

The new petrochemical complex is adjacent to the company’s 9.69 million tonnes refinery at the port city. The project is scheduled for completion in the first half of 2011. ONGC holds 46 per cent stake in OMPL while its subsidiary Mangalore Refinery and Petrochemicals Limited (MRPL) has 3 per cent. The balance 51 per cent would be with financial institutions and banks.

Official sources said naphtha produced at MRPL, the capacity of which is being ramped up to 15 million tonnes a year from its present nameplate capacity of 9.69 million tonnes annually at an estimated cost of Rs. 8,000 crore, would be the feedstock for producing petrochemical building blocks paraxylene and benzene.

OMPL, in April this year, signed a licence agreement with UOP, a world leader in aromatic plant technology for a process to convert naphtha into benzene, toluene and xylene.

Toyo Engineering has been selected as its management consultant. However, the company has put on hold plans to set up an olefin complex at Mangalore.

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