KPC to take share in OMPL and OPAL petrochemicals
The national oil companies (NOCs) Kuwait Petroleum Corporation (KPC) and the Indian Oil and Natural Gas Corporation (ONGC) are about to sign a memorandum of understanding (MOU) by which the Kuwaiti company should take share in two major petrochemical projects at Mangalore and at Daheij in India.
In Mangalore, ONGC Mangalore Petrochemicals Ltd (OMPL) is planning to expand again the refinery and build the largest aromatic complex in India, while in Daheij, ONGC Petro Additions Ltd (OPAL) is working on a multi-billion olefins and aromatics complex.
These ONGC projects are intended to help India to catch up with is bubbling domestic demand for more and more advanced hydrocarbon products.
Kuwait is the fourth largest supplier of crude oil to India after Saudi Arabia, Iraq and Venezuela.
Located on the southwest coast of India, in the State of Karnataka, the ONGC Mangalore Refinery and Petrochemical Ltd (MRPL) saw its last expansion completed in 2012.
Now ONGC is considering to increase again capacity with a fourth expansion in order to provide the feedstock to the greenfield aromatics project to be added by OMPL, adjacent to the Mangalore refinery.
– The largest paraxylene production unit in India with 900,000 tonnes per year (t/y) of capacity
– A benzene production unit with 275,000 t/y of capacity.
According to the terms of the signed agreement and after the completion of the ongoing due diligence study, KPC should buy stake in the ONGC Mangalore OMPL Refinery & Aromatics project so that the working interests should be shared between:
– ONGC 46% is the operator
– KPC 26%
– MRPL 3%
OMPL Mangalore and OPAL Daheij projects in design
With more than $5 billion capital expenditure, ONGC is planning to build in the Daheij Special Economical Zone, within the Gujarat State along the northwest coast of India a petrochemical complex including:
– Propylene production unit with 340,000 t/y capacity
– Benzene production unit with 135,000 t/y capacity
– Butadiene production unit with 95,000 t/y capacity
– ONGC 26% is the operator
– KPC 26%
– Plus at least one additional partner 27.5%
ONGC is still looking for a strategic alliance with a foreign company to take the remaining shares of the project and provide its licences and technology expertise to develop such a large complex in India.
ONGC and Kuwait Petroleum expect the Mangalore Refinery and Aromatics OMPL project and the Daheij Petrochemical OPAL project to come on stream in 2015, but most likely the size and complexity of these projects may delay the first commercial operations to 2017.