Kuwait Petroleum Corporation (KPC) has again approached Indian Oil Corporation (IOC) for a stake in the Rs. 29,777-crore Paradip refinery, which is set to start operations this year.
Kuwait had evinced interest in taking a stake in the project in Odisha when it was conceived about eight years back. But later, they backed off.
“They have again approached. Talks are at very initial level. Things are at very preliminary stage,” IOC Director (Refineries) Sanjiv Singh said here.
When IOC started work on Paradip project, Tatas were to do its power plant, Pradip Port Trust its jetty and Kuwait was to be a strategic partner. But as project got delayed due to land and other issues, the private partners pulled out.
“We had in March stated that KPC is in talks with IOC for an equity stake. Those talks remain at preliminary level. Not much has progressed,” another official said.
IOC, which will start commissioning the 15 million tonnes a year refinery at Paradip in Odisha in next one month, is willing to offer no more than 26 per cent stake in the project.
“We are discussing details of their participation, whether they are interested in taking a stake in the refinery or in the petrochemical project or both is what we are discussing now,” the second official said.
IOC wants to closely examine conditions that Kuwait may attach for equity participation. “If the equity participation will be subject to the refinery buying all or most of its crude oil requirement from Kuwait then that will be a big no-no from us as we don't want to tie ourself down to just one supplier,” he said.
So far, KPC has not conditioned its stake to any crude deal. “They are open to supplying crude oil on fixed term basis and also see no problem as IOC was to independently source the oil,” he said.
The refinery has been built to process at least 40 per cent of toughest, heaviest and the dirtiest crudes like Maya of Mexico which are cheaper than the cleaner and easier varieties available from the Middle-East. The refinery will have a Nelson Complexity Index of 13, the highest in the world.
The project will have to be spun off into a separate company if Kuwait is to participate in it. IOC plans to set up a Rs 3,150 crore Polypropylene unit adjacent to the refinery in 39 months.
