ONGC plans petrochemical complex in the south

Jun 21, 2004 02:00 AM

Oil and Natural Gas Corporation (ONGC) is planning a Rs 9000-crore petrochemical complex through its subsidiary, Mangalore Refinery and Petrochemicals Ltd. (MRPL), in the southern coastal town. A LNG terminal at the port, an extraction plant to feed the petrochemical complex and power units could be the other facilities within the hub.
While the terminal is estimated to cost Rs 5,000 crore, the extraction plant could require Rs 1,000 crore. Sources said a decision on the issue would be taken in three months.

The petrochemical plant will run on two kinds of feedstock. While naphtha will come from Mangalore Refineries, ethane /propane will be derived from LNG at the extraction plant.
A senior ONGC official said the move is in sync with plans of global oil firms to integrate businesses for value-addition.
"At ONGC, we are working along the same lines, to have more backward integration. No longer will we remain an exclusive upstream company," he said.

ONGC has opened talks with RasGasof Qatar to import 10 mm tons of LNG for its Mangalore project. However, it will not need all the gas that arrives here.
"We will sell the surplus to fertiliser and power plants based in the southern region," the official said.
Of the 10 mm tons of LNG that is likely to be imported, about 1.8 mm tons will be used by Oil and Natural Gas Corp itself -- to extract ethane and propane, the main feedstock for the petrochemical plant. In addition, about 0.5 mm tons will be taken by Mangalore Refinery and Petrochemicals.

RasGas has a long-term contract with Petronet LNG, of which ONGC is a co-promoter; the Qatar firm also has a minority stake. There are no indications if ONGC will offer RasGas a stake in its Mangalore LNG project.
The hub -- LNG terminals, re-gasification units, ethane, propane and LPG plants, petrochemical complex and power stations -- will be housed in Mangalore’s special economic zone, which ONGC will co-promote.

Officials say ONGC is keen to invest in Mangalore because MRPL is shaping up well -- so well that the refinery is headed for a capacity expansion.
"Naphtha from the refinery needs to be sold or used at a captive petrochemical unit. We have gone for the second option as it promises huge financial benefits," they added.

Source: The Telegraph
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