The expansion plans will be implemented by ONGC’s joint venture ONGC Petro addeds Ltd (OPaL) and its subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL).
In a bid to expand its petrochemical production capacity, Oil and Natural Gas Corp (ONGC) will invest Rs 1 trillion by 2030, reports The Economic Times (ET). This is part of the Centre’s larger plan to make India a major global petrochemical hub.
ONGC’s joint venture ONGC Petro adds Ltd (OPaL) and its subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL) will implement the expansion plans. Maharatna aims to double the production of these companies to 8 million metric tons per year by 2030.
In addition, two mega-projects are also in the pipeline, one on the east coast of the country and the other on the west. These plants will either use crude oil directly to make chemicals or take supplies from other sources, the report added.
However, ONGC has two challenges to overcome before starting the expansion.
The first is OPaL’s distorted capital structure. The company, a joint venture between ONGC and Gas Authority of India Ltd (GAIL), has taken on a cumulative debt of Rs 35,000 crore on a very small share capital. An ET report said a group of experts is working on either making OPaL a subsidiary of ONGC or getting a new equity investor.
The Center had earlier rejected ONGC’s plan to inject Rs 10,000 crore into OPaL, which would have made it a subsidiary of the petrochemical giant.
The second challenge is the decline in the supply of cheap domestic natural gas. The Center diverted domestic natural gas supplies to other sectors, making ONGC highly dependent on expensive imported gas.