LN Mittal-owned Mittal Investments is planning a joint venture agreement with Hindustan Petroleum Corporation for the upcoming Rs.16,000 crore Bathinda refinery-cum-crude pipeline project. The agreement is likely to be signed shortly.

Mittal Investments and HPCL will hold 49 per cent stake each in the joint venture, while a financial institution (as yet unnamed) is likely to pick up the remaining 2 per cent. Mittal Investments holds 38 per cent in Mittal Steel Co, the Netherlands-based flagship company of the LN Mittal group.

Once the agreement is signed, Mittal Investments will be required to deposit $100 million in an escrow account, pending government approval to the joint venture.

HPCL has invested about Rs.500 crore through its 100 percent subsidiary Guru Gobind Singh Refinery, which is executing the project. An approval will be sought from the Foreign Investment Promotion Board and the Cabinet before forming the JV with Mittal Investments.

The project entails setting up a 9 million tpa refinery unit at a cost of Rs.13,000 crore and laying a 1,100 km crude oil pipeline from Bathinda to Mundra port in Gujarat, besides a crude oil terminal and associated facilities in Mundra.

With this investment, the Mittal group will mark its entry into oil refining. In addition, HPCL and the Mittals has also plans in jointly executing a 9 million tpa refinery unit at Visakh in Andhra Pradesh.

Also See:

Bhatinda Refinery: Financial closure by February 2007 (23-Nov-06)

HPCL seeks partners for Vizag expansion project (04-Dec-06)