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Cash prop for Haldia project

Calcutta, Nov. 26: Kuwait’s Kharafi Group has stepped in to save Bengal’s second refinery project from its financial problems.

Al Qebla Al Watya, the Kharafi investment vehicle, will chip in with $150 million through global depository receipts (GDR) for Delhi-based Cals Refineries, which is building the refinery at Haldia.

Cals is in physical possession of 400 acres at Haldia. It has bought a refinery from Bayernoil, Germany.

The old refinery is being dismantled at Ingolstadt along the river Danube and shipped to Haldia.

The project is running almost three years behind schedule. Promoters of the company, Spice Energy Group, could not arrange the funds in time.

The Kharafi investment, subject to the approval of the Indian government, is likely to iron out the glitches.

Manabendra Guha Roy, CEO of Cals, said the refinery, capable of producing Euro-IV compliant fuel, would start commissioning by 2012. “The shipment from Germany should start coming in the next six months.”

The project cost is estimated to be $1.1 billion, or Rs 5,000 crore. It will become Bengal’s second oil refinery after Indian Oil Corporation’s facility in Haldia.

Global energy major BP Plc may supply oil to the refinery, which needs 2.5 million tonnes of heavy (high sulphur) crude and a similar supply of light (low sulphur) crude.

Apart from petrol and diesel, it will produce jet fuel, LPG and pet coke for the domestic market.

Cals has tied up with Bharat Petroleum Corporation Ltd (BPCL) to sell petrol and diesel from the plant, securing a complete offtake of products. BPCL will take 50 per cent of the produce, while BP may export the rest.

The Cals investment paves the way for the Kharafi family’s entry into the Indian petroleum sector.

Cals Refineries clocked the highest volume on the BSE today. The stock with a face value of Re 1 closed at 27 paise against yesterday’s close of 28 paise, with 8.09 crore shares traded.

Kharafi Group operates in more than 30 countries and has more than 100,000 employees.

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