New Delhi, Sept. 12 (PTI): The Nagarjuna group has offered Indian Oil Corporation a 18 per cent equity in its upcoming six-million tonne refinery at Cuddalore in Tamil Nadu.
Facing a shortfall of Rs 200 crore, Nagarjuna Oil has diluted its earlier condition for take-or-pay contract for marketing of products from the refinery. The new proposal calls for offtake on ‘best effort basis’, sources said.
A major portion of the equity is tied up with Nagarjuna Fertilizers and Chemicals Ltd which holds 51 per cent. The Tamil Nadu Industrial Development Corporation Ltd (Tidco) holds 2 per cent while Oman Oil Company has 26 per cent of the equity. “IOC’s participation to the extent of Rs 200 crore will enable NOCL to achieve financial closure,” Nagarjuna Oil said in its offer to Indian Oil.
NOCL has also offered attractive discounts on products uplifted by IOC ex-Cuddalore refinery besides offering spare capacity of its marine facilities at Cuddalore including single point mooring system (SPM) for transporting crude in very large crude carriers (VLCCs), sources said. Cuddalore can be used as an intermediate storage location for further distribution to other IOC refineries.
The project has been appraised and approved by the Industrial Development Bank of India (IDBI). The project cost of Rs 3480 crore is being financed in the debt equity ratio of 2:1.
NOCL’s project involves relocation of an existing refinery of Mobil, Germany with total refurbishment, revamp, upgradation and modernisation, coupled with addition of several new plants and equipment including captive power plant and captive port terminal.
The health check and residual life assessment have been done by RWTUV, Germany and Engineers India Ltd, which have certified the residual life of the refinery as more than 20 years, sources said.
The project is being implemented by ABB Lummus, which has provided guarantees for completion and performance. Crude supply and export product off-take is provided by Caltex. Domestic product off-take, operation and maintenance, training and other technical advisory services are being sought from IOC, they said.