ONGC to finalise power, petro plans; acquires control of MRPL

Our Corporate Bureau
28 May 2004

The Oil and Natural Gas Corporation (ONGC) will finalise its plans to enhance its presence in the petrochemical and power business within three months. According to R S Sharma, director finance, ONGC, "Oil companies all over the world are integrating their businesses. Foraying into the petrochemical business is very much on the cards. A decision in this regard will be taken within three months." ONGC has already taken the first step in this direction by acquiring control of Mangalore Refinery and Petrochemicals Ltd (MRPL) that will give it a downstream presence. It has also obtained permission to set up retail outlets and is already a small player in the LPG segment of the industry.

ONGC has already proposed investing Rs5,000 crore by 2008 to set up a 10-million tonnes LNG import and re-gassification plant and Rs1,100 crore in a plant to extract ethane / propane and LPG from an LNG terminal at Mangalore port.

Around Rs9,000 crore is planned for setting up a dual feed petrochemical complex at Mangalore, based on ethane / propane extracted from LNG and naphtha from MRPL, now a subsidiary of ONGC. ONGC proposes to use 1.5 million tonnes of LNG for its 1,445mw, Rs3,200-crore power plant at Mangalore SEZ.

Another Rs3,500 crore has been allocated for a power plant at Ennore in Tamil Nadu. Pipelines to Ennore, Kochi and Goa will be laid from Mangalore, at a cost of about Rs2,000 crore, for supplying lean gas to industries in Tamil Nadu, Kerala and Goa.

Meanwhile, ONGC is in talks with RasGas of Qatar for sourcing 10 million tonnes of LNG for its Rs25,000 crore Mangalore project that includes setting up 2,500mw power plant and petrochemicals complex.

The LNG import and re-gassification terminal, ethane / propane and LPG recovery plant, petrochemical complex and power plant will come up in the Special Economic Zone notified by Karnataka Government in and around Mangalore. ONGC, whose subsidiary MRPL will also fall in the notified zone, will be the co-promoter of the SEZ, ONGC sources said.