Steel czar LN Mittal plans to team up with Total SA of France and Hindustan Petroleum Corporation Ltd (HPCL) to set up a mega greenfield refinery-cum-petrochemical project at the proposed petroleum, chemicals & petrochemicals investment region near Visakhapatnam in Andhra Pradesh.
This will be Mittal?s second footprint in the petroleum and petrochemical sector in India, after his investment in HPCL?s refinery at Bhatinda, Punjab. The project also marks HPCL?s foray into the petrochemical sector.
The new integrated greenfield project is expected to cost over Rs 30,000 crore. Mittal, along with HPCL, is already implementing a Rs 24,000-crore joint venture refinery project at Bhatinda. Mittal Energy Investments is an equal partner with the government, each holding a 49% stake in the refinery. A memorandum of understanding for executing this project will be signed shortly.
GAIL (India) and Oil India Ltd are expected to be the other joint venture partners in the project. HPCL?s board met on Wednesday to clear the proposal for signing the MoU with Mittal Energy Investments, Total, GAIL and OIL. Confirming the move, a senior HPCL official said the joint venture route was the most appropriate to leverage the strengths of both the Indian and the multinational partners for the project. Sources said HPCL is already in the process of acquiring 1,500 acres of land from Andhra Pradesh Industrial Infrastructure Corporation for this project.
Mittal?s project will compete with Reliance?s upcoming 29-million tonne project at Jamnagar SEZ, besides IOC?s refinery-cum-petrochem projects of 15 million tonne each at Panipat and Paradip.
The developments could, therefore, mark the beginning of new competition for leadership in this critical sector between the LN Mittal group and the Reliance Group. The competition could intensify as the government is planning to set up more petrochemical complexes to act as mother industries for downstream ancillary projects in the sector to promote industrial growth.
Mittal Energy Investments Ltd of Singapore is a 100% subsidiary of Mittal Investments Sarl, which is wholly owned by Mittal and his family members. Mittal Investments Sarl, in turn, holds 38% equity in Mittal Steel Company NV, which merged with Arcelor to form Arcelor Mittal, the world?s largest steel company both in terms of production volumes and revenue.
Total SA is part of Total Group, a major international oil group, which is engaged in upstream and downstream oil activities worldwide, with consolidated experience in the refining and marketing of petroleum products.
A pre-feasibility study conducted by Axens of France has shown that the Vizag project will involve setting up an aromatics complex, to include the production of paraxylene, benzene, PTA and LAB in a phased manner. A naphtha cracker plant for producing ethylene, propylene, polyethylene, polypropylene and styrene has also been proposed. In addition an integrated refinery, capable of processing high sulphur crude, along with associated facilities and a captive power plant, will also be set up.