Companies

Trafigura picks up 24 % stake in Nagarjuna Oil

Construction work in progress on the storage tanks at the Cuddalore refinery of Nagarjuna Oil. Photo: Bijoy Ghosh   | Photo Credit: Bijoy Ghosh

Trafigura Pvt. Ltd., a commodity trader in the global sphere, has picked up close to 24 per cent equity in Nagarjuna Oil Corporation Ltd. (NOCL) by investing around Rs.650 crore.

NOCL is implementing a six million tonne oil refinery project at Cuddalore in Tamil Nadu at an estimated outlay of Rs.7,160 crore.

According to S. Ramasundaram, Managing Director and CEO, the project will have a debt-equity ratio of 1.8:1. In the wake of its investment, three representatives of Trafigura will join the board.

Further investment

Trafigura will also invest a further Rs.600 crore into the construction of storage facilities and associated infrastructure.

This will be done through another joint venture between Trafigura and NOCL called Portoil Ltd. This joint venture will have 80 per cent equity by Trafigura and 20 per cent by NOCL. This will come up on a 100-acre land near the refinery's 2,500-acre site, says a release from the company.

Revised project cost

Mr. Ramasundaram said the refinery project cost had to be revised upwards to Rs.7,160 crore from Rs.4,790 crore. The revision followed addition of secondary processing unit to the project plan. This was done with the aim of improving the refining margin, he pointed out. Including the cost of utilities and captive facilities such as minor port, power plants and marketing terminals, the total cost of the refinery project would be around Rs.10,000 crore, said the release.

Tamilnadu Industrial Development Corporation, Tata Petrodyne, Cuddalore Port Company Ltd. and Uhde of Germany are the other partners in the refinery project. This was the first of its kind investment for Trafigura, said the release. According to the release, the refinery, once operational, can process 100 per cent heavy/sour grades of crude and will supply light and middle distillates up to European-IV standards. “The commission work is expected to start later this year,” the release said. NOCL had already a marketing agreement with IOC, it added.




Our code of editorial values

This article is closed for comments.
Please Email the Editor

Printable version | Nov 30, 2021 5:27:25 PM | https://www.thehindu.com/business/companies/trafigura-picks-up-24-stake-in-nagarjuna-oil/article3307945.ece

Next Story