ONGC to borrow $1 bn fund for aromatic petrochemical complex

New Delhi: State-run Oil and Natural Gas Corporation (ONGC)said it will borrow $1 billion to fund its proposed Rs 6,400 crore aromatic petrochemical complex at Mangalore.

ONGC Mangalore Petrochemicals (OMPL), a special purpose vehicle promoted by ONGC, has mandated SBI Caps to arrange for the funds for the $1.52-billion plant adjacent to the company's 9.69 million tonnes refinery at the port city, a company official said.

'The project is scheduled for completion in first half of 2011,' he said.

ONGC holds 46 per cent stake in OMPL, while its subsidiary Mangalore Refinery and Petrochemicals (MRPL) has 3 per cent. The balance 51 per cent would be with financial institutions and banks.

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 per annum at an estimated cost of Rs 8,000 crore, would be the feedstock for producing petrochemical building blocks Paraxylene and Benzene.

The official said, 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. 'We are still not convinced about the plant,' he said.