The project, near IOC's Panipat refinery, envisages an installed capacity of 301 mw -- sufficient to meet the requirements of entire Haryana, an official spokesperson told reporters here. While IOC and Marubeni would have a 26 per cent stake each in the power project, the rest would be shared by various financial institutions and other associates, she said.

Vacuum residue fuel (VRF) would be the feedstock for the power plant that would come from the six million metric tonnes per annum (mmtpa) Panipat refinery of the IOC. The joint venture with Marubeni was aimed at increasing the profitability of IOC, the spokesperson said.

IOC has also submitted a proposal to expand the capacity of the refinery from the present six mmtpa to nine mmtpa at an estimated cost of Rs 1605crore.

Corporation sources said the public investment board (PIB) had given the first stage clearance for the expansion of the refinery in December 1998. The power project will have a debt to equity ratio of 2.33:1 in which the equity will amount to Rs 500 crore, the sources said.

The Rs 3,868 crore six million tonne refinery has already processed 1.2 million tonnes of crude oil since its trial run in May last besides LPG, naphtha, kerosene, high speed diesel and heavy petroleum stock and furnace oil.

Apart from the power plant, the corporation is also planning to set up a petrochemical project at an estimated cost of Rs 4056 crore. The company is also scouting for joint venture partners for this petrochemical project and is awaiting the second stage clearance from the government, the sources said.

Paraxylene and PTA will be produced in the complex which will also be using feedstock provided by the refinery. The expansion of the refinery is expected to be completed within 36 months of the projectgetting government clearance, the sources said adding the expansion cost will be lower than setting up a grassroot refinery.

Malaysian national oil company Petronas is likely to pick up 26 per cent stake in the petrochemical project and the two companies are only awaiting CCEA clearance for a formal joint venture pact, the sources said.

Apart from Petronas, Oil and Natural Gas Corporation (ONGC) and a ``prospective end user in the textile industry'' have indicated interest in picking up equity in the venture. IOC plans to put up capacities for paraxylene and PTA (purified tetraphthalic acid) of 3,50,000 tonnes and 5,25,000 tonnes respectively using special cut naphtha supplied by Panipat and Mathura refineries, they said.

IOC would have a 26 per cent stake in the company and Petronas will pick up an "equal stake or less". Besides, an end user like modern industries might be offered nearly 10 per cent share in the project which will have a total equity component of Rs 1400 crore.

The project isexpected to be completed in around three and half years after second stage clearance. The sources say MoU drafted by IOC and Petronas would also be sent to the petroleum ministry after CCEA approval.