The board of GAIL India, the country's largest transporter and marketer of natural gas, on Wednesday approved a proposal to pick up to 19 per cent stake in Oil and Natural Gas Corporation's (ONGC) petrochemical project in Gujarat.
"Our board of directors on Thursday approved buying up to 19 per cent stake in ONGC's Dahej petrochemical plant," said UD Choubey, chairman and managing director, GAIL. He declined to divulge investment details for the stake buy.
However, Choubey added that ONGC was currently offering only 9 per cent stake in the plant. "We will discuss with ONGC and see how much stake we can get," he added. The Dahej petrochemical plant is being constructed by ONGC Petro-additions Ltd (OPaL) at an investment of Rs 12,440 crore (Rs 124.40 billion) and is likely to be completed by February 2012.
While ONGC has management control with 26 per cent stake, Gujarat State Petroleum Corporation holds 5 per cent stake in the company. The project also involves setting up a methane and propane (C2-C3) extraction unit.
Methane and propane are fractions found in "rich" gas. This is used as feedstock for gas cracker plants and for LPG production. GAIL, with 5,470 km of gas pipelines, operates a gas cracker petrochemical plant at Pata in Uttar Pradesh.