Walchandnagar Group to build production platforms

Vol 11, PW 19 (07 Feb 08) Midstream & Downstream

Andhra Pradesh in southern India might soon be the beneficiary of a new facility to build offshore drilling and production platforms.

PETROWATCH learns the Mumbai-based Walchandnagar Group, one of the country’s oldest heavy engineering conglomerates, is threatening to move the site of its proposed new production facility from Dahej to a site in Andhra Pradesh because state authorities in Gandhinagar are dithering over a request for land. “If there is more delay we have the Andhra Pradesh option,â€‌ confirms a senior Walchandnagar source.

“But we prefer Gujarat because of its conducive business climate.â€‌ Last year the Walchandnagar Group set up a new oil and gas division to tap growing demand in India and overseas for offshore platforms and drilling rigs, particularly with ONGC.

Gujarat state authorities signed a MoU with Walchandnagar in October last year with a promise of 75 to 80 acres of industrial land for its proposed facility near Dahej, site of Petronet-LNG’s regassification terminal. But three monthson and there’s still little to report, forcing Dr.

C. Jankiram, head of Walchandnagar’s new oil and gas division, to write to state authorities on January 15 complaining about the lack of progress.

A state official in Gandhinagar confirms receipt of Dr. Jankiram’s letter but says the state government is powerless to do anything as, “there are many other important projects waitingâ€‌ to be allotted industrial land in and around Dahej.

In short, Walchandnagar would have to wait its turn. Walchandnagar is not alone in experiencing problems.

Visitors to Dahej report a mini-property boom for industrial land, with companies attracted to the port by its proximity to accessible energy supplies (R-LNG) and two tax-friendly Special Economic Zones: one promoted by ONGC and Gujarat Industrial Development Corporation, and 'notified' by the government; the other by the Baroda-based Sterling Group, but not yet â€کnotified’. “Land prices are skyrocketing in Dahej,â€‌ reports our correspondent.

“They have risen by 100% over the last 12 months and are now around Rs7 lakh to Rs8 lakh per acre.â€‌ Small comfort for Walchandnagar, which has set aside an investment of Rs350cr ($87m) for the new venture and is talking to a potential foreign JV partner.