The government has approved ONGC's proposal to additionally invest Rs. 183.65 billion in ONGC Petro-additions Limited (OPaL), the oil and gas giant announced in a statement, and added that this would increase ONGC's stake in OPaL from 49.36% to 95.69%.
ONGC’s total investment in OPaL so far will also thus, add up to Rs.227.28 billion.
This move is to increase ONGC's presence across the downstream and petrochemical value chain.
OPaL is a petrochemical complex based in Dahej, Gujarat, which was commissioned in 2017. It has the largest standalone dual feed cracker in South-East Asia.
A dual feed cracker converts naphtha and off-gases from refining into polymer grade ethylene and propylene using a process which is known as thermal cracking. Thermal cracking can also produce byproducts such as benzene, butadiene, gasoline, and toluene.
OPaL has the capacity to produce up to 1.5 million metric tonnes per annum (MMTPA) of polymers and 0.5 MMTPA of chemicals and has a 12% market share in India's polymer segment.
The deal can also make OPaL be able to get a sustained supply of gaseous feed from ONGC at a premium of up to 20% over the government's Administered Pricing Mechanism (APM) gas price. ONGC is currently allowed a premium of up to 20% over the APM price.
