Singapore, 12 April 2012 - Trafigura Pte Ltd today announced the investment of up to USD130 million into a significant equity stake (up to approx. 24%) in the Nagarjuna Oil Corporation Limited (NOCL) oil refinery. The refinery is being constructed at Cuddalore in the State of Tamil Nadu, India. In addition to acquiring an equity stake, Trafigura will invest a further USD120 million into the construction of extensive storage facilities and associated infrastructure at the refinery’s 2,500 acre site.
Trafigura’s investment in the NOCL refinery is the first of its kind for the company, enabling it to create operational efficiencies and to add value to its customers’ supply chains. Geographically, the facility is well positioned to receive crude oil from Trafigura’s international producer partners. The investment also affords the company the ability to participate in India’s domestic market where rising incomes, higher vehicle sales and rapid urbanisation are driving the country’s position as one of the world's fastest-growing major economies.
The refinery to be operated by NOCL will have an annual capacity of six million tonnes. It can process 100% heavy/sour grades of crude and will supply light and middle distillates up to European IV standards. Other partners in the project include TIDCO, a Government of Tamil Nadu enterprise, and Tata Petrodyne, a Tata Group enterprise.
The location of the refinery, on the east coast of India, provides numerous strategic advantages including the ability to receive Very Large Crude Carriers (VLCCs) via a single point mooring. It is also well-positioned to meet the needs of the State of Tamil Nadu which currently has a shortfall in the supply of clean petroleum products.
Commissioning work at the refinery is expected to start this year with commercial operations scheduled to begin during the first half of 2013.
Mr Jonathan Pegler, 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.
"India is fast emerging as a leading hub for oil refining, with domestic demand rising and an increasing trend towards cleaner refined products. In this context, the NOCL Refinery agreement represents a significant development for us. It also has the support of the Tamil Nadu State Government, which is committed to developing the region’s petrochemical infrastructure. Once fully operational, the refinery will greatly improve the supply of oil products to local retailers.
Mr KS Raju, Chairman of the Nagarjuna Group, welcomed the commitment stating: “This is a significant milestone for Nagarjuna Oil Corporation Ltd (NOCL) as it seeks to complete construction and commissioning of its six million tonne oil refinery at Cuddalore in Tamil Nadu, India. I am excited with this unique partnership which will bring significant value to the company and the State of Tamil Nadu in the years to come.”
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