UPDATE 1-India's ONGC may offer GAIL stake in petchem plant

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NEW DELHI, Feb 12 (Reuters) - Indian explorer Oil and Natural Gas Corp (ONGC.BO) may offer a 15-20 percent stake in its planned petrochemical project in western India to gas firm GAIL (India) Ltd (GAIL.BO), a senior ONGC official said on Thursday. Another gas firm, Petronet LNG (PLNG.BO), could get a 5 percent stake in the project, A.K. Balyan, business development director at ONGC, told reporters.

ONGC on Monday said it had signed a 68-billion-rupee ($1.39 billion) contract with a consortium comprising South Korea's Samsung Engineering (028050.KS) and Germany's Linde AG (LING.DE), for the petrochemical project to be set up by ONGC Petro additions Ltd (OPaL).

ONGC will supply feedstock like naphtha for the project from its plants at Hazira, Uran and Dahej in western India.

OPaL, promoted by ONGC and Gujarat State Petroleum Corp (GSPC), is expected to complete the project by 2012.

Balyan said debt for the project, which will cost a total 124.40 billion rupees, is expected to be raised within three months.

He said State Bank of India (SBI.BO), Punjab National Bank (PNBK.BO) and Canara Bank (CNBK.BO) were among the banks which have expressed an interest in lending for the petrochemical project.

Balyan said up to 25 percent of the project may be offloaded through a public offer within 18 months.

The plant is expected to have an annual capacity of 1.1 million tonnes of ethylene, 340,000 tonnes of propylene, 135,000 tonnes of benzene and 95,000 tons of butadiene. These products are used as source materials in the plastics industry.

($1 = 48.8 rupees) (Reporting by C.J. Kuncheria, Editing by Mark Williams)