Oil and Natural Gas Corp (ONGC) is looking at an initial public offering (IPO) of its subsidiary that is building a Rs 13,600-crore petrochemical plant at Dahej, closer to project completion in 2012.
ONGC is considering selling up to 25 per cent of the equity shares in ONGC Petro-additions Ltd (OPaL), the special purpose vehicle formed for setting up the petrochemical complex at Dahej SEZ, a senior company official said.
It plans to give 19 per cent equity stake in OPaL to state-run gas utility GAIL India, while another 25 per cent interest may be offered to Petronet LNG and Bharat Petroleum or a strategic partner.
"We are not considering the IPO right now. The offering may happen in 2010-11 or even closer to the project completion in 2012," the official said.
ONGC holds 26 per cent stake in OPaL and five per cent is with Gujarat State Petroleum Corp (GSPC).
OPaL will use C2-C3 (ethane and propane) compounds extracted from imported liquefied natural gas (LNG) to make polymers at the proposed plant.
The Rs 1,100-crore plant to extract C2-C3 from the LNG that Petronet imports from Qatar would be ready by year-end but the petrochemical project would not come up before 2012.
ONGC would in the interim period sell C2-C3 compounds to companies like Reliance-owned IPCL or even export, he said.
While GAIL had sought equity in OPaL as it already had a presence in petrochemical business, Petronet may be offered an equity as it imports five million tons a year of rich-LNG (gas containing C2-C3 compounds).
The official said the project is being funded in 2.55:1 debt-equity ratio.