Indian Oil, BP in pact to set up 1 mt acetic acid plant

New Delhi: BP and Indian Oil Corporation are planning to set up a 50:50 joint venture acetic acid plant in Gujarat. The two companies entered a memorandum of understanding to invest in a one-million-tonne a year acetic acid plant with associated gasification facilities for production of synthesis gas. Acetic acid is used in petrochemicals and paints, apart from other products. A joint feasibility study is currently under way to confirm the exact configuration of the project, which is expected to be commissioned in 2015, separate statements issued by the two companies said. The proposed plant would employ BP's latest Cativa XL technology, whilst the gasification facilities would utilise petroleum coke feedstock from Indian Oil. On whether BP-Reliance Industries agreement will have any impact on this understanding, official sources said, “The BP-Reliance Industries agreement does not include venture into acetic acid business.” Sources said, currently, Gujarat Narmada Valley Fertilisers Company (GNFC) is producing acetic acid. GNFC's plant is unable to meet the entire domestic demand. GNFC capacity is 1.6 lakh tonnes a year. The current supply-demand gap is about six lakh tonnes, the official said, adding that the gap is met through imports. “By the time the joint venture plant is proposed to come up (in 2015), the gap would be about one million tonnes, which is the proposed capacity of this plant.” Indian Oil has recently commissioned a coker unit with one million tonne petcoke capacity at Gujarat Refinery. The acetic acid will be a good opportunity for enhanced value addition besides providing window for import substitution, the official said.

Reliance Industries, BP signs $7.2 bn oil & gas deal

NEW DELHI: UK's BP Plc will buy 30 per cent stake in Reliance Industries' 23 oil and gas blocks including the giant KG-D6 gas fields off the east coast for USD 7.2 billion.

BP could further pay USD 1.8 billion "on exploration success that results in development of commercial discoveries," RIL said in a press statement.

The two firms will also enter into a 50:50 joint venture for sourcing and marketing of gas.

BP CEO Bob Dudley and RIL Chairman and Managing Director Mukesh Ambani will make a joint announcement later in the evening.

BP's combined investment including payments to Reliance could amount to USD 20 billion. Ambani and Dudle "signed the relationship framework and transactional agreements in London," the statement said.

"The partnership across the full value chain comprises BP taking a 30 per cent stake in 23 oil and gas production sharing contracts that Reliance operates in India.

This includes producing KG D6 block, and the formation of a 50:50 joint venture between the two companies for the sourcing and marketing of gas in India," it said.

The joint venture will also endeavour to accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas in India.

Reliance said the partnership will combine BP's world class deepwater exploration and development capabilities with Reliance's project management and operations expertise.

"This partnership meets BP's strategy of forming alliances with strong national partners, taking material positions in significant hydrocarbon basins and increasing our exposure to growing energy markets," said Carl-Henric Svanberg, Chairman of BP.

The 23 oil and gas blocks together cover approximately 270,000 square kilometres. Reliance will continue to be operator of the blocks.