New Delhi, Aug 24: Indian Oil Corporation (IOC) is scouting for partners among national and multinational power utilities to create 1,410 mw power projects based on unmarketable vaccum residue fuel from its refineries.

The Rs 7,000 crore projects are to be created through joint ventures, corporation sources said and added multinationals like Mitsubishi, Marubeni, Houston and Light Power Corporation, Singapore Power Corporation have evinced interest in partnering with the oil giant in India.

Presently the corporation is converting the thick residue from its refineries into fuel oil by diluting it with diesel, industry sources said and claimed that diversification of IOC into power sector would enhance the navratna PSUs profitability sizeably.

IOC has already identified its refineries in Panipat, Baroda, Haldia and Mathura for promoting the power projects near the same site, sources said.The power and petroleum ministry are working on evolving a pricing mechanism for VRF as a fuel for the power project as the high viscose substance was not covered under the administered price mechanism because of its unmarketability.

Following a review meeting of refineries and central power utilities, convened by the power secretary EAS Sarma, ministry sources claimed that about 2,000 mw of power capacity could be created through VRF route during the ninth plan period.

The Panipat refinery would be able to support a 300 mw power plant with an estimated investment of Rs 1,500 crore and the Baroda and Haldia refineries could fuel 500 mw projects each with a total investment of about Rs 5,000 crore.

The Mathura refinery would support a 110 mw project at an estimated cost of Rs 500 crore, the sources said.

The public sector corporation would have about 26 per cent stake in the project with an equal share coming from the joint venture partner, while the rest of the amount would be mobilised through debt and equity, they said.

IOC has already prepared a preliminary feasibility report and would frame a detailed feasibility report only after tying with the joint venture partner.It would later go to the Central Electricity Authority (CEA) for approval.This would provide an oppurtunity for the public sector corporation to diversify its role into other activities apart from engaging in activities of refineries sector, they said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.