Oil and Natural Gas Corporation has expressed interest in partnering Rashtriya Ispat Nigam and Bharat Heavy Electricals [ Get Quote ] on a proposed Rs 2,000 crore (Rs 20 billion), joint venture seamless tubes manufacturing plant at Vizag and talks are on between the parties.
"While BHEL has already agreed to join as a joint venture partner in the proposed seamless tube mill at Vizag, ONGC [ Get Quote ] has also evinced interest and discussions are in progress," RINL chairman and managing director A P Choudhary told PTI.
Choudhary favoured the inclusion of ONGC in the venture and indicated that there should not be any resistance from BHEL to bring the oil major on board, since seamless tubes find application in a wide area, including the energy, oil,gas and water sectors.
"It will be win-win for all of us," he said.
While he stated that the shareholding pattern of the proposed venture is yet to be finalised, he asserted the majority stake would be held by RINL, as the proposed facility would be housed inside RINL's Vizag facility.
"The mill will have four lakh tonnes per annum seamless tube installed production capacity. Total investment here will be over Rs 2,000 crore (Rs 20 billion)," Choudhary said.
The joint venture agreement is likely to be signed before the end of the current year and once that is done, tendering for the plant and machinery will follow, he said, adding this might take place before the end of the current fiscal.
"It might take two to two-and-a-half years from the start of tendering for the plant to be operational," he said.
RINL's lone facility at Vizag has a 3 million tonnes per annum installed capacity. It is in advanced stages of commissioning 3.3 million tonnes per annum of additional capacity.
"After meeting the requirements of the domestic market, we will also export tubes to destinations like West Asia and others," he said.