ONGC eyes foreign co for stake sale in Gujarat petchem project

NEW DELHI (Reuters) - Oil and Natural Gas Corp aims to sell at least a 25 percent stake in its $3.24 billion petrochemical project in Gujarat and is looking at foreign buyers, including Saudi Aramco, a company official said.

The project, being built by ONGC Petro-additions Ltd (OPaL), will be commissioned by mid-2014 and will have an annual capacity to produce 1.1 million tonnes of ethylene.

"We have engaged Ernst & Young as our adviser. They are in talks with several companies across the world and Saudi Aramco is just one among them," K.S. Jamestin, a director at ONGC and OPaL, said. Nothing is definitive as of now, he added.

"If the offer is good we won't mind giving more than 25 percent ... somebody who brings in value in terms of their expertise in certain terms of the project like marketing, innovation like that," he said.

Economic Times on Tuesday reported that Saudi Aramco plans to buy up to a 30 percent stake in the project.

The dual feed cracker will use naphtha from ONGC's Hazira complex and gas from its extraction plant at Dahej in Gujarat, Jamestin said.

State-run ONGC is the promoter of the project and owns a 26 percent stake. GAIL (India) and Gujarat State Petroleum Corp hold a 15.5 percent and 5 percent share, respectively.

Private shareholding through a mix of strategic stake sale and public offering would be about 50 percent in OPaL, while state-run companies would hold the remainder, Jamestin said.

OPal plans to launch a public offering in 2015, he said. (Reporting by Nidhi Verma; Editing by Himani Sarkar)