State-owned oil refiner CPC Corp, Taiwan (台灣中油) has decided to scrap a planned petrochemical project at the Mundra special economic zone in India’s Gujarat State after viewing an assessment of the Indian project.
Based on the assessment conducted by consulting firm Axens Horizon, the proposed Indian project would need large amounts of money, but come with low investment efficiency, which made other members of the investment team unwilling to proceed to the next stage of assessment, CPC said in a statement on the company’s Web site yesterday.
The project is estimated to require a total investment of as much as NT$400 billion (US$12.97 billion), CPC said, citing Axens Horizon’s evaluation.
The consultant was hired to conduct the assessment from July to November last year, the refiner said.
CPC said it had decided to find another location in India for the petrochemical project and would establish an office in India to learn more about the country’s investment environment, taxation system and related regulations, CPC said.
Local media last year reported that CPC was in talks with the Adani Group, which operates India’s largest thermal power plant, to build the petrochemical park together.
The two sides had been in discussions over the project, CPC said yesterday, adding that Adani’s proposal might bring higher investment risks and transportation costs, as its proposed site is about 30km from Mundra Port in Gujarat and sits close to major fault lines.
Local media earlier in the week reported that Adani was no longer interested in working with CPC and decided to team up with Germany’s BASF SE for a joint investment at Mundra Port.
BASF said in a press release on Thursday that it had signed a memorandum of understanding to evaluate a 2 billion euro (US$2.27 billion) joint investment in the acrylics value chain, with a feasibility study likely to be completed by the end of this year.
CPC said the content and business scope of its investment plan is different from BASF’s, which focuses on the production of petrochemicals and chemical compounds derived from acrylic acid, adding that it was not totally responsible for the collapse of the potential partnership with Adani.
“To cope with the government’s New Southbound Policy and increase its overseas investment, CPC will continue seeking investment opportunities in India,” the company said. “The company is now in talks with Indian companies including state-run Indian Oil Corp Ltd and Oil and Natural Gas Corp Ltd regarding further cooperation and investment opportunities.”
Separately, CPC yesterday said it would raise domestic gasoline and diesel prices by NT$0.3 per liter, effective today.
That marks the company’s third consecutive week of price hikes due to rising global oil prices.
Fuel prices at CPC gas stations would rise to NT$26.4, NT$27.9 and NT$29.9.per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel would increase to NT$24.2 per liter, CPC said in a statement.
Formosa Petrochemical Corp (台塑石化) announced identical hikes, also effective today.
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