The move comes as the project faces major cost overrun.
In 2008-09, GAIL acquired 19% interest in ONGC Petro-additions (OPaL), which is constructing a mega petrochemical complex at Dahej.
Earlier, the estimated cost of the 1.1 million tons plant was INR12,440 crore ($2bn) but since the cost of the project has been revised thrice now reached to INR21,396 crore ($3.5bn).
Press Trust of India cited a GAIL official as saying that the company decided to invest up to 1,000 crore ($167.3m) in 2008-09 for acquiring 19% equity stake in OPaL.
"Since then project cost has gone up and so has promoters’ contribution. Our board has decided to keep out investment capped at already sanctioned Rs 1,000 crore and so our stake in the project will come down," the official added.
ONGC holds 26% stake in the project, which was originally to be funded in 70:30 debt-equity ratio (70% loan and 30% equity contribution from promoters).
However, debt-equity ratio has been changed to 60:40 at the date of commissioning, which is likely to be around February 2015.
Image: GAIL to reduce equity stake in ONGC’s petrochemical project. Photo: Vichaya Kiatying-Angsulee/Freedigitalphotos.net.
