Mobil Corp To Set Up Refinery, Eyes Lng Market
Mobil Corporation, the $66 billion American oil and petroleum company, has put in a bid to join national oil and gas companies in distributing and marketing liquefied natural gas (LNG) in the country. The company is also setting up a 5 million tonne, second hand refinery in Cuddalore, Tamil Nadu, costing around $750 million.
Mobil is one of the 17 foreign companies that have bid for joining the public sector consortium to distribute LNG in the country.
On Wednesday, additional petroleum secretary Devi Dayal had announced in Delhi that Indian Oil Corporation, Oil & Natural Gas Corporation, and Gas Authority of India Ltd were joining hands to set up a project to import and market LNG in the country.
Craig L Murphy, chief executive officer of Indo-Mobil Ltd, the lubricants joint venture between Mobil and IOC, said in Mumbai yesterday that the public sector consortium had invited bids from foreign partners. The last date is in January.
The final structure of the project will emerge only after the consortium chooses the foreign partner. It is too early to say anything about it now, he said.
The terms and size of the four-company consortium including the equity structure will also be known only then.
They have indicated they will decide within two months, Murphy added.
The LNG project will set up infrastructure like import terminals, pipelines and receiving stations.
Mobil is the second foreign company to indicate its interest in LNG distribution in the country. Some days back, Enron Corporation had also announced its intention to invest in LNG infrastructure in the country.
An alternative to coal for power plants, LNG is considered to be a much cleaner and cheaper fuel.
A gas-based power plant will take three to four years to complete, against a thermal plants timeframe of five years.
LNG can also be used in fertiliser and petrochemicals.
Mobil has a sizeable presence in oil refining, lubricants, LNG and crude oil exploration and production.
It is ranked 22 on the Fortune 500 list after Exxon and Royal Dutch Shell but before British Petroleum Elf Aquitaine, Texaco, Chevron and Amoco.
In India, it has a 50:50 joint venture with IOC for marketing Mobil lubricants in the country.
Murphy said Mobil had long-term plans for the country.
We are here to stay. We want to grow and develop the market and our interests are lubricants, LPG, LNG and refining.
The company is setting up a 5 million tonne, second-hand refinery in Cuddalore, Tamil Nadu.
The plant for the refinery will be imported from Germany and set up at a cost of $750 million. Establishing a new refinery of the same size will cost anything up to $1.4 billion, said Murphy.
The capacity can be expanded to 12 million tonnes.
Mobil has not decided on the equity structure of the project.
It might take IOC as a joint venture partner, but those details are still being worked on.
The capital cost will be much lower than others and we have taken care of environmental standards. Although second-hand, the refinery has been continuously upgraded and modernised to make it competitive, Murphy explained.