Bhatinda refinery IPO soon: L N Mittal

Steel tycoon Lakshmi N Mittal may in future go for an initial public offering (IPO) of the just commissioned Bhatinda refinery, where a low-cost expansion is planned to raise capacity from 9 million tonnes to 11.2 million tonnes.

Mittal, whose diversification into the energy space with state-run Oil and Natural Gas Corp (ONGC) had a patchy record, wants to use his joint venture with Hindustan Petroleum Corp Ltd (HPCL) as the platform for growth in oil sector.

"HPCL Mittal Energy Ltd (HMEL) is a good platform to grow (in energy space)," Mittal said here.

But his focus currently is to stabilise production at the 9 million tonnes Bhatinda refinery that was dedicated to the nation by Prime Minister Manmohan Singh yesterday.

Once the refinery, built by HMEL -- the equal joint venture of HPCL and Mittal Energy Investment -- stabilises and starts making money, he would think of the next steps like doubling the capacity to 18 million tonnes, foraying into oil and gas exploration and investing in raising complexity of the refinery to improve margins.

"I am not ready for my guys to think loud" before the refinery stabilises in a years time, he said adding a low-cost expansion of existing units to raise refining capacity to 11.2 million tonnes would be considered after that.

Mittal had in 2005 teamed up with ONGC for his big energy splash and formed two companies -- one for exploration and production of oil and gas, and other for oil trading.

But the joint ventures lost sheen first because ONGC was not interested in trading business and then the 2008 economic downturn forced Mittal to restrict himself to his core business of steel making.

"The partnership (with ONGC) is not over but there are not many projects that the partnership is discussing," he said.

... contd.

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