The issue was discussed at the ONGC board meeting on August 13. OpaL was expected to be commissioned in the first quarter of the current year, which has now been delayed to next year. There is a further rise in costs due to the interest on loans, an official directly involved with the project told FE.
Currently 93% completed, the project has raised debt to the tune of R14,000 crore. ONGC holds 26% in the project while GSPC and GAIL have 5% and 19% equity, respectively. In fact, the joint venture partners are looking to sell the remaining stake to strategic investors.
This is not the first time that costs have overshot at OpaL. At inception, the estimated investment was R12,440 crore. This was revised upwards to R15,870 crore in 2008 and further to R19,535 crore in 2010. It currently stands at R21,396 crore. SBI Caps has reworked the cost while Engineers India (EIL) is the projects management consultant.
The board is yet to approve a new cost for OpaL. Though the cracker has been commissioned, utilities related to power and water supplies have been delayed and would be ready only by September. The petrochemical complex is now likely to be commissioned by June 2015.
The rise in costs may also lead to a holding rejig by ONGC's partners, GAIL and GSPC. For instance, GAILs board approved an investment of R996.28 crore at inception, which, at the revised cost, would fetch less than 12% stake.
OPaL is setting up a grassroot mega petrochemical project at Dahej in Gujarat. The complex's main dual feed cracker unit will have the capacity to produce 1,100 kiloton per annum (KTPA) ethylene, 400 KTPA propylene and the associated units consist of pyrolysis gasoline hydrogenation unit, butadiene extraction unit and benzene extraction unit.
OPaL targets to export products to countries such as Africa, China, Singapore, Turkey, Pakistan, Vietnam, Malaysia, Indonesia, Bangladesh and Sri Lanka.