BORL to set up petrochem unit at Bina

Mumbai: Bharat Refinery (BORL), a 50:50 joint venture between Bharat Petroleum Corporation (BPCL) and Oman Oil Company, will construct a petrochemical plant near its upcoming 6 million tonne per annum crude oil refinery at Bina in Madhya Pradesh.

“Once the refinery begins operation (in January 2010), the petrochemical unit will follow,” said a senior company executive.

The capacity of the proposed petrochem unit is not yet known. According to analysts, setting up a 1-million tonne per annum petrochemical unit costs around Rs 10,000 crore.

BORL is reported to have approached the Madhya Pradesh government, seeking 1,000 acres of land to construct the petrochemical unit.

BORL last week filed a draft red herring prospectus with market regulator Securities and Exchange Board of India (Sebi) for raising around invest Rs 2,900 crore through a public issue.The money raised from through share sale will be used to fund the refinery at Bina.

Prior to the share sale, BORL will privately place shares worth around Rs 900 crore with its promoter BPCL and Rs 26.90 crore worth shares with the Madhya Pradesh government.

The company has already signed a product offtake agreement with BPCL, the country’s second largest marketer of petroleum products. The products from the refinery will be marketed in central and north India.

BPCL is planning to lay a pipeline project rconnecting the Bina unit with its existing product pipeline between Mumbai and Bijwasan near Delhi.