GMR to rope in partners for Kakinada plant

The GMR Group, which is into infrastructure and energy, has planned to bring in strategic partners to set up a proposed refinery and petrochemicals plant at Kakinada in Andhra Pradesh.

GMR holds 51 per cent stake in the Kakinada Refinery & Petrochemicals Ltd project, which will come up at the Kakinada Special Economic Zone (KSEZ) in Andhra Pradesh. “We will rope in a strategic partner or multiple partners once we decide to go ahead with the refinery project. As of now, it is not an immediate priority for us,” A Subba Rao, Group chief financial officer, told Business Standard. The executive said the Group had not finalised the implementation strategy for the refinery. “Once that is done, we will start talking to potential partners,” he said.

Sources said the project, initially planned with 7.5-million tonne per annum (mtpa) capacity, was later scaled up to 15 mtpa capacity. This may require investment of Rs 30-35,000 crore. GMR entered the refinery project in June 2008, after the public sector Oil and Natural Gas Corporation and its subsidiary, Mangalore Refinery & Petrochemicals Ltd (MRPL), decided not to join the refinery and SEZ project. IL&FS and Kakinada Sea Port together hold 46 per cent and Andhra Pradesh Industrial Infrastructure Ltd the remaining three per cent stake in the project. The GMR Group is currently focused on high-growth areas such as airports, energy, the road sector and urban infrastructure, besides its traditional sugar and agri-business. GMR’s entry into the refinery project was in line with the group’s business intent to grow in the oil, gas and refinery sectors. GMR currently operates three power plants and is developing 10 power projects. It had also acquired 50 per cent stake in Intergen, a Massachusetts-based power generation company.

Meanwhile MRPL, which exited the refinery project, is expanding its crude refining capacity from 9.69 million tones a year to 15 million tonnes a year. Sources said Chennai Petroleum Corporation Ltd, a subsidiary of Indian Oil Corporation is also planning a 15 million tonne a year capacity refinery complex in Cuddalore.