ONGC to lend Rs 5,000 cr to MRPL for part-financing proj
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Last Updated: Tuesday, January 19, 2010, 22:59
  
New Delhi: State-run Oil and Natural Gas Corporation will lend Rs 5,000 crore to its subsidiary Mangalore Refinery and Petrochemicals Ltd for expansion projects.

MRPL is expanding its refining capacity to 15 million tons a year from present 9.68 million tons per annum at a cost of Rs 12,160 crore. Besides, it is setting up a 450,000 tons a year propylene unit at an investment of Rs 1,804 crore. Both the projects are scheduled for commissioning by March 2012.

"We will lend Rs 5,000 crore to MRPL at 3.85 percentage points lower than State Bank of India's prime lending rate, which presently works out to 7.9 per cent," ONGC Chairman and Managing Director R S Sharma said.

Propylene can be converted into polypropylene, which is used in a wide range of industries.

While MRPL will spend another Rs 5,000 crore from internal accruals, it would raise the balance Rs 4,000 crore in overseas debt by March 2012, MRPL Director (Finance) L K Gupta said.

MRPL Managing Director U K Bose said MRPL was ready to produce Euro-IV grade petrol and would begin production of same grade diesel from April.

The company may import 12.1 million tons of crude oil in 2010-11 fiscal, he said.

Basu said the company was also planning to invest Rs 1,000 crore in setting up a single-point mooring facility near the Mangalore port. SPM would help MRPL import crude oil in very large tankers.

ONGC holds 71.62 per cent stake in MRPL while HPCL has about 14 per cent.

Sharma dismissed reports of HPCL wanting to exit MRPL saying "they are pure rumours and are totally incorrect."

PTI


First Published: Tuesday, January 19, 2010, 22:59


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