Mittal buys 49% stake in HPCL's refinery for Rs 3,300 cr

New Delhi, Feb 20 (UNI) Petroleum Minister Murli Deora today said steel tycoon Laxmi Mittal has acquired 49 per cent stake in the state-run Hindustan Petroleum Corporation Ltd (HPCL) Rs 16,700 crore Guru Gobind Singh Refinery project in Bhatinda, Punjab, to to be completed by September 2010.

''HPCL is entering into a joint venture with Mittal Investments for 9 MMTPA refinery project both will hold 49 per cent equity each in the project while 2 per cent will be held by financial institutions,'' Mr Deora told reporters here.

Mittal Investments is a company incorporated in Luxemburg with 100 per cent equity held by Mittal family. Mittal Investments has promoted Mittal Steel company where they hold 38 per cent equity stake.

''The project will be completed in 48 months and will have capability to process 100 per cent high sculpture and heavy crude,'' HPCL Chairman M B Lal said.

The project would be financed with debt equity ratio of 1.5:1 making equity portion of Rs 6,600 crore.

Mr Lal added Mr Mittal will invest Rs 3,300 crore in the JV.

''HPCL will enter into an MoU with Mittal Investments for exploring various business opportunities overseas,'' Mr Lal said.

He said HPCL may enter into the gas processing sector and jointly acquire some refinery overseas.

''This would pave the way for further investments in the refinery sector,'' Petroleum Secretary M S Srinivasan said.

Commenting on possibility of making Oil India as a partner, Mr Srinivasan said ''the door is open''.

The steel king had already ventured into the oil business by forming an exploration joint venture, ONGC-Mittal Energy Ltd, with ONGC for acquiring oilfields abroad.

ONGC-Mittal has two acreages in Nigeria. Mittal investments had last year bought Russian Lukoil's 50 per cent share in Kazakhstan for a billion dollars.

Before talking to Mittal, HPCL had held talks with Saudi Aramco, BP, ExxonMobil and Total.

Mittal will also partner in the 1,000-km pipeline being laid by HPCL to transport crude from Mundra port in Gujarat to the refinery in Punjab, the sources add.

The investment comes a year after BP pulled out saying the project was unviable. The new refinery at Bhatinda will have a capacity of 1,80,000 barrels a day and is scheduled to be commissioned in 2010-11.

UNI