Top BASF officials in Mumbai, in a faxed response, said that BASF has licensed technology for the extraction of butadiene through the internationally known firm, Lummus. The technology deal does not cover a buyback arrangement, they added.

"The licensing agreement covers only the extraction of butadiene and further use of butadiene is not a subject matter of the licence. But, BASF has no financial stake," they said.

The new synthetic rubber project is expected to be implemented in two phases. The polybutadiene rubber plant will be subsequently followed by a styrene butadiene unit, each with a capacity of 50,000 tonnes per annum. BASF's role in the deal will ensure sustenance of butadienesupply.

Though the details of Bayer's interest in the project could not be ascertained, country head and Bayer India managing director, Alan McGilvray, had in an earlier interview told The Financial Express that the company was evaluating the possibility of expanding its Indian polymer business to the area of synthetic rubber. The German giant, the global leader in synthetic rubber, is essentially looking at a production site for the south-east Asian region.

The German multinational, industry sources say, had at one point been talking to petrochemicals giant Reliance for its synthetic rubber project since such it is esentially based on key feedstock, butadiene. No officials confirmation on this was, however, available.

Synthetic rubber finds application in a range of industries including tyres and conveyor belts and a greenfield facility could take atleast two years to build and another two-three years to reach optimum capacity.