Prime Minister, Dr Manmohan Singh, has cleared ONGC's Rs.21,000 crore investment plan for setting up LNG, power and petrochemical projects at Mangalore in Karnataka.

A communiqué from the Prime Minister's office dated 15 July 2005 stated: "After due consideration of all aspects of the matter, the Prime Minister has approved the various projects at Mangalore under the MoU between ONGC and Karnataka."

ONGC, it may be recalled, had entered into an MoU with the Karnataka government in August 2004 to invest Rs.25,000 crore in several projects in Mangalore. ONGC could not proceed with its proposal following reservations by the Union petroleum ministry.

ONGC has planned to set up a Rs.7,475 crore petrochemical and aromatic, Rs.8,594 crore LNG-based project, Rs.3,590 crore C2/C3 recovery plant and LNG terminal and Rs.945 crore gas transportation pipelines.

Mangalore Refinery & Petrochemicals, a subsidiary of ONGC, would be the implementing agency for the entire project while ONGC would provide finances and guarantees. LNG imports will be contracted by ONGC.

The PM has also approved ONGC as co-promoter of the Mangalore Special Economic Zone with the Karnataka government. ONGC has also been allowed to float wholly owned subsidiaries for petrochemicals and power project and "float equity in the market and/or to non-competing technology partners, retailing a minimum 26 per cent and exclusive management control."

Chronology of Developments:

Mangalore SEZ: ONGC signs MoU with Karnataka (31-Aug-04)

ONGC should rethink Karnataka investment plans: Minster (18-Oct-04)

ONGC's Mangalore SEZ project fragmented (10-Jan-05)

ONGC ropes in Ashok Leyland for Mangalore project (02-Apr-05)

Also See:

ProjectsToday's Special Study: ONGC's Diversification Plans (May 2005)