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 India's OPal seeks investor for $4.2bn cracker project in Dahej  
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MUMBAI (ICIS)--ONGC Petro-Additions Ltd (OPal) has accelerated efforts to bring in a strategic investor for its $4.2bn (€3.15bn) cracker and derivatives project at Dahej, Gujarat, India, a senior company executive said late on Tuesday.

"We have hired Ernst & Young to identify companies in the Middle East," said Dr P.S.V. Rao, CEO of OPal. "All the pre-requisites for bringing in an investor have been completed in the last six months; this includes the feedstock agreement, the financial information memorandum, the shareholders' agreement and the sponsors agreement," he told ICIS in an interview.

Rao indicated that a strategic investor can expect marketing rights for some of the products that will be produced by OPal.

"Everything is open except operations and maintenance," he said.

The strategic investor will have an option to take a 25% stake in the project which includes a 1.1m tonne/year mixed-feed cracker, a 340,000 tonne/year high density PE (HDPE) unit, two swing HDPE/linear low density PE (LLDPE) lines with a capacity of 360,000 tonnes/year each and a 340,000 tonne/year polypropylene (PP) plant.

State-owned ONGC has the biggest stake in OPaL at 26%, while oil and gas transportation firm GAIL India Ltd has a 15.5% interest and Gujarat State Petroleum Corp (GSPC) owns 0.5% of the project.

Around 25% of equity has been kept for an initial public offering (IPO), the timeline for which has yet to be decided.

OPal's debt equity ratio is currently at 70:30 and would stand at 60:40 after the introduction of the strategic investor and an IPO.

OPal has been seeking a strategic investor for a few years and international majors such as Sabic were reported to have expressed interest.

While previous efforts had not yielded results, Rao expected greater interest this time as OPal's project was at an advanced stage with the company targeting commissioning in July 2014.

OPal is also looking to attract Indian public sector companies to take small stakes in the company to plug in the gap in funding after GSPC's decision to keep its shareholding at 0.5% instead of the previously agreed 5%.