To make up for the fund shortfall, the promoters are likely to announce a foreign equity partner for a 26% stake in the project by as early as December, sources privy to the matter told FE.
Talks for equity participation with a foreign company are in the last phase. The announcement may be made in the next 30-45 days, said one of the officials directly involved with the discussions. He did not divulge the name of the foreign players talking to OPaL promoters.
In January, ONGC had signed an initial agreement with Kuwait Petroleum Corporation (KPC) for broad cooperation by which the West Asian firm could buy a stake in OPaL.
OPaL is now set to achieve mechanical completion by March next year while commercial production would kick off by June 2015, the official added.
This is not the first time OPaLs costs have gone up. The initial estimated investment of Rs 12,440 crore was first revised upwards to Rs 15,870 crore in 2008, further to Rs 19,535 crore in 2010 and again to Rs 21,396 crore last year. The new estimate of Rs 27,100 crore is yet to be approved by the ONGC board.
After taking over, minister of state (independent charge) for petroleum and natural gas Dharmendra Pradhan had directed ONGC to complete OPaL and ONGC Mangalore Petrochemicals (OMPL) on top priority.
The project has raised debt to the tune of Rs 14,000 crore. ONGC holds a 26% stake in the project while GSPC has 5% and GAIL has 19% in the project. The joint venture partners are looking to sell the remaining stake to strategic investors.
The official said the cracker has already been commissioned. Other utilities related to power and water supplies are also being commissioned.
The rise in cost may also lead to a rejig in the equity participation by ONGCs partners GAIL and GSPC. For instance, the GAIL board approved an investment of
Rs 996.28 crore at inception, which, at the revised cost, would fetch a lower stake.
OPaL is setting up a grassroots mega petrochemical project at Dahej in Gujarat. The complex's main dual-feed cracker unit will have the capacity to produce 1,100 kilo-tonnes per annum (ktpa) ethylene and 400 ktpa propylene, and the associated units consist of a pyrolysis gasoline hydrogenation unit, a butadiene extraction unit and a benzene extraction unit.
OPaL aims to export products overseas to countries such as Africa, China, Singapore, Turkey, Pakistan, Vietnam, Malaysia, Indonesia, Bangladesh and Sri Lanka.