The talks are part of Essar’s aim to become an integrated oil and gas firm, sources familiar with the matter told The Economic Times.
Essar has created an integrated petrochemicals complex concept, which includes expansion of its refinery in Vadinar, Gujarat, India.
Essar, which has more than $14bn net debt, is seeking finance from BASF for the entire project at least for the initial years, the sources said.
However, Essar aims to invest its share of equity over a three-to-five-year period.
One of the sources said: "It is still not clear if it will be an equal 50/50 JV or BASF will retain a 70% share.
"They would want majority (stake) since they are likely to finance the project almost entirely to start with.
"These structuring and funding-related discussions are still ongoing."
SBI Capital Markets, a wholly owned subsidiary of the State Bank of India, is currently preparing a financial feasibility report and detailed project appraisal.
