Trafigura Pte Ltd, the Singapore-based unit of the world’s third-largest crude oil trader, Netherlands’ Trafigura Beheer BV, picked up a 24 per cent stake in Nagarjuna Oil Corporation Limited (NOCL). NOCL is setting up an oil refinery in Tamil Nadu.Trafigura will invest around Rs 650 crore for the stake and another Rs 600 crore in Portoil Ltd, a 80:20 joint venture (JV) between NOCL and Trafigura.
With this stake, Trafigura has replaced BP as NOCL’s crude supplier.
“With BP, Nagarjuna Oil had a commercial agreement for crude supplies and export of products but Trafigura has come as a strategic investor ... it is buying a stake in the project,” said a source privy to the deal.
K S Raju, chairman of the Nagarjuna Group, said in addition to acquiring an equity stake, Trafigura would invest the additional Rs 600 crore into the construction of extensive storage facilities and associated infrastructure through Portoil Ltd. This will come up in a 100-acre site near the refinery’s 2,500-acre site.
NOCL is setting up a six-million tonne oil refinery at Cuddalore in Tamil Nadu. Commissioning work at the refinery is expected to start later this year.
Jonathan Pegler, Trafigura’s director of oil Asia Pacific said, “This is an important, long-term venture for Trafigura and is an exciting project for all concerned. It plays directly to the strengths of Nagarjuna as a leading process operator and to Trafigura as a company committed to balancing international supply and demand for oil products”.
NOCL’s refinery will be an anchor unit for the proposed Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) in the Cuddalore-Nagapattinam belt. The PCPIR envisages an investment of over Rs 13,000 crore in developing infrastructure in the region over the next ten years.
The Nagarjuna Petroleum refinery is being constructed at Cuddalore in Tamil Nadu at an estimated cost of Rs 7,160 crore. Including the cost of utilities and captive facilities like minor port, tankages, power plant, marketing terminal etc, the total estimated cost of the NOCL refinery project is around Rs 10,000 crore.
Trafigura is one of the leading international commodity traders, handling a diverse range of raw materials from oil and refined products to non-ferrous metals, iron ore and coal to clients around the world.
Other partners in the NOCL Refinery project include TIDCO, a Government of Tamil Nadu enterprise, and Tata Petrodyne, a Tata Group enterprise, Cuddalore Port Company Ltd and Uhde of Germany.