Shell to take stake in Nayara Indian petchem project

Oil major Royal Dutch Shell is reportedly planning to buy a 50% stake in Indian-based Nayara Energy’s US$9 billion planned petrochemical project, according to a Reuters report.

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The 1.8 million tonnes/year full steam ethylene cracker and linked downstream units to be built at Vadinar in western Gujarat state would cost up to US$9 billion and would be completed in five years, said market sources.

The project will also have an aromatic complex and capacity to produce 10.75 million tonnes of a variety of petrochemicals, according to Nayara’s proposal to the environment ministry.

Global oil majors are looking at expanding foothold in the vast Indian market, where local refiners are investing billions of dollars to boost their petrochemical capacities.

Shell and Nayara (previously known as Essar Oil), which is part-owned by Russian oil major Rosneft, are said to have signed an MoU recently, with an equal joint venture to be created for building the project.

Nayara is also investing US$850 million to build a 450,000 tonnes/year propylene-recovery unit, a polypropylene (PP) plant with a production capacity of 450,000 metric tonnes/year, and a 200,000 tonnes/year methyl tert-butyl ether plant at the Vadinar refinery that should be ready within 30 months.