Bharat Petroleum Corporation is planning to increase its stake in Petronet CCK by 26 per cent.

BPCL has accepted the offer to buy the stake from Petronet India (PIL), which is winding up its operations. After the deal, BPCL stake in Petronet CCK will go up to 52 per cent.

Petronet CCK, operates a 292 km petroleum product pipeline from BPCL's Kochi refinery to the company's oil terminal at Karur in Tamil Nadu. The company was set up under the aegis of Petronet India to construct and operate the pipeline from Kochi to Karur.

PIL will soon offer its 26 per cent stake in its other joint ventures with the oil companies for sale to its joint venture partners. PIL has joint ventures with Indian Oil Corporation called Petronet VK, with BPCL called Petronet CCK and with Hindustan Petroleum called Petronet MHB.

In the joint ventures PIL holds 26 per cent and the oil companies another 26 per cent. In Petronet CCK, the other investors are Kochi Refineries (23 per cent), which is a BPCL subsidiary, State bank of India (4.99 per cent), IDFC (19.97 per cent) and Infrastructure Leasing and Financial Services (0.04 per cent).

PricewaterhouseCoopers has completed the valuation of Petronet CCK and the report has been submitted to BPCL. Petronet India's board has approved the stake sale and an offer has been made to BPCL. The 26 per cent stake is estimated at around Rs.13.53 crore.

Once the 26 per cent stake in Petronet CCK is bought, BPCL, which is also constructing a grassroot 6 million tonne per annum refinery at Bina in Madhya Pradesh, will have the option of completely buying out Petronet CCK and merging it with itself.

Petronet India is a financial holding company in which Indian Oil Corporation, Hindustan Petroleum and BPCL jointly hold 50 per cent of the equity stake. Private sector companies Essar Oil, Reliance Petroleum and other investors hold the balance equity.