CPC, Adani near ~400 bn deal for Mundra petrochem park

Gujarat is likely to receive one of the largest tranches of foreign direct investment (FDI) in recent years with Taiwan’s state-run petroleum major China Petroleum Corporation Taiwan (CPC Corp) set to come up with a ~400 billion petrochemical park at the Mundra special economic zone.

The Taiwanese major, with interests in energy exploration, production, refining and petrochemicals, is likely to set up the park in association with the Ahmedabad-based Adani group.

“Talks are in their final stages. An agreement is likely to be signed during the next Vibrant Gujarat summit. The project may require around 800 hectares,” said a person aware of the development.

Taiwan External Trade Development Council Chairman James Huang earlier this week told the Taipei Times that the Adani group and CPC Corp were in discussions to jointly build a petrochemical park in the Mundra SEZ.

“This will be one of the largest foreign direct investments in Gujarat in recent years. The plant will produce products like ethylene and will also have a naphtha cracker,” the source added.

CPC Corp and the Adani group did not respond to questions in this regard.

CPC Corp executives have held a round of meetings with Gujarat Chief Minister Vijay Rupani in this regard. Though CPC Corp wants the Adani group to take up a major stake in the project, the Indian major is yet to decide on its participation.

CPC Corp Chairman Tai Chein has raised concerns about the Adani group not buying a 26 per cent stake in the project. There were also concerns about the tariff structure and transportation costs from India.

Sources said the Taiwanese company was also in talks with the Andhra Pradesh government for the project.

However, they confirmed a memorandum of understanding was likely to be signed during the ninth edition of the Vibrant Gujarat Summit in Gandhinagar next January.

Proposed investments in Gujarat rose 40 per cent to ~790.68 billion in 2017 from ~561.56 billion a year earlier.

The number of investment proposals, too, has risen from 415 in 2016 to 428 in 2017, according to the department of industrial policy and promotion (DIPP).

In 2018, the state received investment plans worth ~83.65 billion through 105 proposals. Last year, Karnataka was the top state with investment proposals worth ~1.522 trillion.