Lakshmi Mittal eyes second refinery in India

NEW DELHI: Steel tycoon Lakshmi Mittal is eyeing a second foray into India's oil sector through a stake in a refinery and chemicals plant to be built by Hindustan Petroleum Corp Ltd, sources involved in the deal said on Friday.

France's Total, state-run gas firm GAIL (India) Ltd and explorer Oil India Ltd are likely to join Mittal in investing in the unit planned for the southern state of Andhra Pradesh, an HPCL official, who could not be named, said.

An Oil India official confirmed participation in the coastal project and said a 180,000 barrels a day refinery would be built.

"But a study will be taken to decide the capacity of the refinery and petrochemical plant," he said, adding the entire project would cost Rs 250-300 billion.

Singapore-based Mittal Energy Investments Pte Ltd, a part of the group that includes Arcelor Mittal, the world's top steel firm, and HPCL own 49 per cent each in a 180,000 barrels per day refinery under construction in northern India.

The new southern complex would be set up under a policy on a petrochemical hubs announced recently by the government.

Although no decision has yet been made, the deal would likely mean HPCL abandoning earlier discussions on building a multi- billion dollar, 150,000 bpd plant with Total, Kuwait Petroleum International and Oil India adjacent to its existing plant, the HPCL official told media.

"The talks are at preliminary stage. We soon hope to sign a non-binding MoU (memorandum of understanding) with the four parties. We need money for executing a big project so it makes sense to have more partners," he said.

HPCL has received an approval from the state government to acquire 1,500 acres of land for the project.

"First we will sign a MoU to jointly execute the project and then the capacity and equity structure will be decided depending on the studies," the official added.

A senior GAIL official also confirmed the talks with Mittal, Total, and Oil India for the southern refinery.

"We are interested in the petrochemical project, we are already into this business in India."

He said HPCL would be the nodal firm for executing the project.