Chennai Petroleum Company Ltd. is in talks with banks to boost a 280 billion rupee ($3.3 billion) mortgage to assist construct a significant oil refinery within the south of India, individuals accustomed to the matter mentioned.
The state-owned firm has already obtained expressions of curiosity, and State Financial institution of India will lead the transaction, in accordance with the individuals, who requested to not be named because the deliberations are non-public. It could be second-biggest local-currency mortgage in India this yr.
The funds will assist construct a proposed 9 million-ton-a-year oil processing plant within the southern state of Tamil Nadu, which has a complete price of round 330 billion rupees. Chennai Petroleum Finance Director Rohit Agrawala mentioned in April that the mission would take 36 months to finish, as soon as it has been permitted by the federal authorities.
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A consultant for Chennai Petroleum didn’t reply to a request for remark.
State-owned Indian Oil Corp. — the nation’s greatest refiner and Chennai Petroleum’s majority shareholder — is within the midst of a speedy growth to boost manufacturing of fuels like diesel and gasoline to fulfill surging home demand. India is a uncommon brilliant spot for a world refining business that’s in decline within the US and Europe, and changing into extra centered on petrochemicals in China resulting from transport decarbonization.
Nationwide Iranian Oil Co. can also be an investor in Chennai Petroleum, with its subsidiary Naftiran Intertrade Co Ltd holding a 15.4% stake. Nonetheless, the Iranian companies aren’t straight taking part in constructing the brand new refinery. Indian oil will personal 75% of the brand new plant – known as the Cauvery Basin refinery mission — and Chennai Petroleum can have the remainder.
SBI Capital Markets, a unit of State Financial institution of India, might be mortgage syndication adviser to Chennai Petroleum, the individuals mentioned.
The biggest local-currency mortgage in India this yr additionally appears more likely to go to an oil refiner. Bharat Petroleum Corp. is in talks with lenders to boost about 320 billion rupees ($3.8 billion), Bloomberg Information reported on the finish of August.
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