Reliance Petro may borrow up to $2 billion for refinery expansion

Mumbai: Reliance Petroleum Ltd is likely to borrow up to $2 billion for expansion, a third more than originally planned, reports Bloomberg quoting sources involved in the deal. REL has commitments worth over $3.4 billion from 50 lenders after meetings in Singapore, Hong Kong, Taipei, Dubai and Bahrain.

The loan will help fund a $6.1 billion investment to double refining capacity in the world''s third largest refinery to and create the world''s largest refinery in Jamnagar by 2008.

The civil construction work of the $6 billion project is currently running ahead of schedule, according to H R Meswani, executive director of Reliance Industries Ltd (RIL), which holds around 80 per cent stake in the new project.

"Once the new refinery in the special economic zone is completed, together with our existing refinery here, ours will be the largest greenfield refinery in the world with 1.24-million barrels per day capacity," Meswani said. "It will put India on the world energy map. It is a refinery based in India but meant for the West. Reliance''s new refinery will be one of the 30 odd refineries worldwide that would be designed to handle any kind of crude," he added.

Reliance Petroleum is also in talks with its foreign equity partner, US-based Chevron Corporation, for firming up terms of cooperation for sourcing crude, marketing petroleum products and technology inputs.

According to the memorandum of understanding signed with Chevron, which has a 5-per cent stake in the project, Chevron has the option to take another 24 per cent, said Meswani.