Shell plans to acquire stakes in Indian petrochemical projects for $9 billion

The oil giant Royal Dutch Shell plans to acquire 50% of a petrochemical project worth up to 9 billion U.S. dollars from Nayala Energy in India.

Global oil giants are considering expanding their footholds in the vast Indian market. Indian refiners are investing billions of dollars to increase their petrochemical production capacity.

As the country promotes durable, inexpensive materials in industries such as agriculture and food packaging, they are seeking to meet the expected surge in demand for everything from plastics to paint.

Sources said that in early June, Shell and Nayala signed a memorandum of understanding and said that they would set up a joint venture with the same shares to build the project. Nayala is partly owned by the Russian oil giant Rosneft.

Another source said: "In November and December last year, Nayala's board of directors discussed the company's petrochemical joint venture with Shell."

The first source said that Wadi Na, located in the western part of Gujarat, will build an all-steam ethylene cracker with an annual output of 1.8 million tons and related downstream equipment at a cost of 8-9 billion US dollars and will be completed within five years.

According to Nayala's proposal to the Ministry of Environment of India, the project will also have an aromatic hydrocarbon complex with a production capacity of 10.75 million tons of various petrochemical products.

In addition to the petrochemical industry, Nayala also plans to expand the daily output of the Wadi Na refinery from 400,000 barrels to 920,000 barrels. The refinery expansion and petrochemical projects are expected to cost nearly 1.3 trillion Indian rupees ($17.39 billion).

In India, Shell operates a liquefied natural gas import terminal, a port, a gas station and a factory that converts waste into gasoline or diesel. Last year, the company signed an equity investment agreement with an Indian company that specializes in biomass polymerization and energy production and processing.