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IOC to invest Rs 1,500 crore

Indian Oil Corporation (IOC) will settle for a stake of 26 or 49 per cent in the Rs 10,000 crore nuclear power project it will set up in collaboration with the Nuclear Power Corp of India Ltd (NPCIL).

business Updated: Dec 07, 2009 22:58 IST

Indian Oil Corporation (IOC) will settle for a stake of 26 or 49 per cent in the Rs 10,000 crore nuclear power project it will set up in collaboration with the Nuclear Power Corp of India Ltd (NPCIL).

“We have signed a memorandum of understanding (MoU) for setting up at least one 1,000 MW nuclear power power plant with NPCIL,” said B.M. Bansal, Director (Business Development) , IOC on the sidelines of the second India-Africa Hydrocarbons Conference in the capital organised jointly by FICCI and the ministry of petroleum and natural gas. “The number of nuclear power plants can be even more but we are immediately planning at least one.”

NPCIL will be the operator and take at least 51 per cent stake in the joint venture, while IOC is contemplating taking either 49 per cent or 26 per cent. The two firms, he said, will in next six months decide on the site, fuel and the project structure.

“Nuclear power gives us a good opportunity to become an integrated energy firm,” he said. “The nuclear power plant will cost Rs 8-10 crore per mega watt but the good thing is that we get 15.5 per cent return on investment.”

IOC, which signed a MoU with NPCIL on November 4 to venture into nuclear power generation, said it may invest Rs 1,000-1,500 crore as equity in the project with NPCIL.

Alongside, Bansal said IOC will in next 2-3 months decide on the fate of its $750 million (Rs 3,500 crore) liquefied natural gas (LNG) import terminal at Ennore on the outskirts of Chennai.

“In next 2-3 months, we will take a decision if Ennore LNG terminal project is to be revived," he said.

IOC had in 2007 put on hold the 2.5 million tonnes a year LNG import-cum-regassification terminal after huge gas finds off the east coast made the project economically unviable.