NEW DELHI/MOSCOW (Reuters) - Oil major Royal Dutch Shell RDSa.L plans to buy a 50% stake in Indian-based Nayara Energy's up to $9 billion planned petrochemical project, a source familiar with the matter said.
Global oil majors are looking at expanding foothold in the vast Indian market, where local refiners are investing billions of dollars to boost their petrochemical capacities.
Shell and Nayara - which is part-owned by Russian oil major Rosneft ROSN.MM - signed a memorandum of understanding in early June, the source said, adding an equal joint venture will be created for building the project.
“The petrochemical joint venture between Nayara and Shell was discussed at board of directors meetings of Nayara in November and December last year,” another source said.
The 1.8 million tonnes a year full steam ethylene cracker and linked downstream units to be build at Vadinar in western Gujarat state would cost $8 billion-$9 billion and would be completed in five years, the first source said.
The project will also have an aromatic complex and capacity to produce 10.75 million tonnes of a variety of petrochemicals, according to Nayara’s proposal to the environment ministry.
Shell declined to comment on the project while Nayara did not respond to a Reuters request for comment.
(This story has been refiled to fix typo in headline)
Editing by Emelia Sithole-Matarise
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