Project Management and Finance

ONGC Mangalore
Petrochemicals
Limited
Group
7
Sectio
nA

Major projects &

financing brief
PROJECT
NAME

OWNER

CAPACITY

PROJECT
COST

FINANCIN
G

STATUS

BCPL,
Assam

JV form
(70% GAIL,
OIL 10%,
NRL 10%,
GOA 10%)

280 KtpA

Preliminary
project
cost: 5461
crore INR

Debt: 2083
crore INR,
Equity:
1040 crore
INR, Govt.
subsidy:
2138 crore
INR,
D/V=40%

Ongoing

Dahej
petrochemi
cal complex

JV form
(ONGC
26%, GSPC
5%, GAIL
19%,
SI/FI/IPO
54%)

1060 KtpA

19535 crore
INR

Debt: 70%,
Equity: 30%

Ongoing

Governments policy regarding

foreign & private investment

To promote investment in this sector and make the country an important

hub for both domestic and international markets, the government has
decided to attract major investment, both domestic and foreign, by
providing a transparent and investment friendly policy and facility regime
under which integrated Petroleum, Chemicals & Petrochemical Investment
Regions (PCPIRs) may be set up.

Under Chapter 98.01 of Customs Tariff Act Import of capital goods are
permitted at the standard rate of duty 20% and other applicable duties.

Government of India will ensure the availability of external physical

infrastructure linkages to the PCPIR including Rail, Road (National
Highways), Ports, Airports, and Telecom, in a time bound manner. This
infrastructure will be created/upgraded through Public Private
Partnerships to the extent possible. Central Government will provide the
necessary viability gap funding through existing schemes. Wherever
necessary, requisite budgetary provisions for creation of these linkages
through the public sector will also be made.

Major Private Players &

ongoing projects

RIL
Haldia petrochemicals Limited

Ongoing projects

Petrochemical expansion project, Jamnagar, RIL:

Amount: $2 billion,
Period: 13 years,
Participated financial institutions:

KfW IPEX-Bank GmbH, Citibank NA, Commerzbank AG,

Nord LB, Banco Santander, SA, Landesbank BadenWrttemberg, DZ BANK AG, BHF-BANK AG, ING Bank, a
Branch of ING-DiBa AG, covered by Euler Hermes.

Project Structure Of
OMPL
Promoted by
ONGC & MRPL
for setting up the
plant in
Mangalore SEZ
To produce 920
TMT of ParaXylene & 140
TMT of Benzene
per annum

Aromatic unit
with feedstock of
Naptha &
reformate to be
supplied from
MRPL
OMPL will utilize
the world
renowned
technology of
UOP - USA, as a
Licensor: Quality
Control

Throughput
Calculation
Paraxylene
Benzene
Parafin Rich
Raffinate
Fuel Gas
LPG
Heavy Aromatics
Hydrogen
Total Capacity

KTPA
900
273
181.9
125.9
18
5.3
25.7
1530

As-built cost of the

project
Component

Cost(in Rs. Cr.)

Core cost of the project

4972.59

Contingency & Inflation

adjustment

303.12

Adjusted Cost incl. Inflation

& contingency

5275.71

Contribution in SEZ Corridor

cost

54

Interest - DuringConstruction
(IDC) & Financing Charges

321.70

Mar in Money
Total

99.30
5750.71

Financial Structure

ONGC &
MRPL
OMPL is
promoted
by:
Investors

ONGC
Equity
Stake: 46%
MRPL
Equity
Stake: 3%
Strategic &
financial
Investors:
51%

Cost Structure
Overhead

Amount/ Ratio

Project Cost

Rs. 5750.71 Cr

Debt Equity Ratio

65:35

Equity

Rs. 2012.75 Cr

Debt

Rs. 3737.96 Cr

Cost Structure
(Continued)
Long term bank facilities: Term loan: INR 2508.06
Cr (CARE A+ rating)
Long term bank facilities: External commercial
borrowing: INR 1250 Cr (CARE A+ rating)
Entire debt tie-up will be initially in the form of
rupee term loan
Total door to door tenor of the loans would be 13
years which includes including 2.75 years for
construction, 1.5 year grace period and
repayment of 9 years with 36 equal quarterly
instalments.

Syndication of banks
Syndicated by State Bank of India
Bank

Amount
(in Rs. Cr.)

Bank

Amount
(in Rs. Cr.)

State Bank of

7.58

Union Bank of

1.5

3.75

India
State Bank of

1.25

2.5

Travancore
Andhra Bank

India
Canara Bank
Bank of Baroda
Punjab National

Bank
UCO Bank
South Indian
Bank

Dena Bank

Punjab & Sind

0.750

Bank
Jammu &

0.750

Kashmir Bank

Valuation, Sensitivity and

ERR

Valuation_Sens itiv
ity_ERR

Risk Mitigation
Operating Risk

Risk Mitigation
Long term Off take agreement with JBF
Industries, Indorama synthetics, BP Asia,
Mitsubishi, Marubeni, Hitachi and Mitsui
Price Volatility
could help in mitigating this risk
Raw material availabilty will be ensured by
Unavailabilty of FeedstockMRPL
Maintenacne risk

Fuel cost

Raw material price

Long term agreement may mitigate the risk
Dealy in commissioning of
plant
No measures

Risk Mitigation
(Continued)
Environmental Risk Risk Mitigation
Strict Regulation
from Govt.
Leakage or other
calamity
Insurance can be useful
Political Risk
Risk Mitigation
Tax and other
SEZ, Tax benefit from govt. on the account of
restriction
locating the plant in SEZ
Legal System
Financial Risk
Interest rate risk

Risk Mitigation
OMPL has the option to prepay the loan on the
interest reset dates without penalty
An option to refinance up to 30% of the debt
through ECA and/or ECB facilities

Reference
Package

http://
www.icis.com/Articles/2008/05/20/1103331/indias-bcpl-eyes-debt-tie-up-for
-assam-cracker.html
(BCPL)

http://www.infraline.com/ong/downstream/OPaL.aspx (OPAL)
http://chemicals.nic.in/petro1.htm
http://chemicals.nic.in/PCPIRPolicy.pdf
http://www.bloomberg.com/quote/GIND10YR:IND
http://pages.stern.nyu.edu/~
ADAMODAR/New_Home_Page/datafile/Betas.html

http://ompl.co.in/products
http://
www.equitymaster.com/research-it/sector-info/petrochem/Petrochemicals-Se
ctor-Analysis-Report.asp
http://pages.stern.nyu.edu/~
ADAMODAR/New_Home_Page/datafile/Betas.html

http://
www.investing.com/rates-bonds/india-30-year-bond-yield-streaming-chart