The country is well and truly on its way to becoming a refinery hub. The second largest state-run refiner and marketer -- Hindustan Petroleum Corporation -- is all set to sell half its stake in the Vishakapatnam refinery to French firm Total SA, which will bring in Rs 6,000 crore (Rs 60 billion).
Total is likely to pick up the stake in collaboration with Kuwait Petroleum.
"We are at a preliminary stage of discussions with Total. Things will be finalised in 2-3 months," M B Lal, chairman and managing director, HPCL, said on the sidelines of a petroleum conference.
He added that no memorandum of understanding was signed as the two companies were looking to enter into a concrete deal. HPCL is setting up a 9 million tonne export-oriented refinery adjacent to the existing refinery at Vishkapatnam at an estimated investment of Rs 12,000 crore (Rs 120 billion).
Lal will meet Total Chief Executive Officer Thierry Desmarest for talks on the planned stake sale.
The refinery would be completed in 2011, Lal said. HPCL is also planning a 1 mtpa petrochemical chemicals plant at the refinery site.
Although Total is likely to partner Kuwait Petroleum in buying the stake at the Vizag refinery, Lal said his company would consider the consortium as a single entity.
"We are also looking to raise funds through an initial public offering (of Vizag refinery). It (the IPO) is a distinct possibility at a later date," he said.
Lal also said Oil India Ltd had approached HPCL for a stake in the in the 9 mtpa Bhatinda refinery. "OIL has expressed interest for equity participation, and the HPCL board will decide on it in a month or two," he said.
The Lakshmi Mittal group is also reported to be in interested in picking up a 49 per cent stake in the refinery in Punjab. Lal said: "We are looking around for partners, and are in talks with several players. Yesterday, we also spoke to Saudi Aramco."
HPCL has tied up with GAIL (India) Ltd for city gas distribution projects in Andhra Pradesh and Madhya Pradesh, and is likely to reach an agreement with the state-run gas marketing company for distribution project in Rajasthan.
"We will launch city gas distribution projects in several cities in Andhra Pradesh, and Indore in Madhya Pradesh. However, we are yet to finalise on Rajasthan," Lal said. He said the investment in each city would be around Rs 200 crore (Rs 2 billion).
