Chennai Petroleum Corporation, Indian
Oil Corporation and their seed equity partners have signed a Joint Venture
agreement for the proposed Nine Million ton processing capacity grass root
refinery and petrochemicals project at Nagapattinam in Central Tamil Nadu
coast.
Nagapatinam being a Port town, a jetty would
be constructed to receive crude.
The refinery complex will be built at a cost of Rs
31,580 crore and will
cater to the demand for petroleum products in South India.
Indian Oil and Chennai Petroleum will
together hold 50 percent stake in the company and the rest would be held by
financial and strategic investors. Indian Oil & Chennai Petroleum are
classified as promoters of this complex. The
overall capacity of the refinery will be 9 Million Metric Tons Per Annum
(MMTPA). The refinery will produce petroleum products including MS
(petrol), HSD (diesel) and LPG, among others. The refinery’s product line will
also include petrochemical products such as polypropylen
The refinery project has been under the proposal stage
for over fifteen years.
Nagapatinam had a mini refinery with a capacity to process one million ton with
the available crude in the region. But the refinery has been dismantled to pave
the way for setting up the nine million ton full-fledged refinery. It is the second refinery to come up in the
Tamil Nadu coast the first one was set up way back in 1965 in Chennai
called the Madras refinery with a capacity to process 12 million tons of crude.
ICICI Bank and Axis Bank together will own 10
percent of the total paid-up capital in the joint venture. Both banks will
acquire 5,000 equity shares of the target entity which will have a face value
of Rs 10 each. HDFC Life will subscribe to 11 percent of the total-paid up
capital of the new entity, subscribing to 5,500 equity shares of face value Rs
10 each. This will be completed within six months from the date of the Joint
Venture Agreement.
SBI Life will also own 10 percent stake
in the target entity by subscription to 5,000 shares with a face value of Rs
10. Shares of Chennai Petroleum are trading 1.1 percent higher at Rs 201.75. |