NEW DELHI (AP) – Mittal Group has agreed to pay $720 million for a 49 percent stake in an Indian refinery being built by state-run Hindustan Petroleum Corp Ltd., India’s petroleum minister said Tuesday.
The investment is a first for London-based steel magnate Laxmi Nivas Mittal, who has diversified into the oil business with exploration deals in Russia and Nigeria, but had yet to put money into downstream projects.
The refinery at Bathinda in northern India is expected to be built over the next four years and process about 9 million tons of crude oil annually, Indian Petroleum Minister Murli Deora told reporters.
HPCL and Mittal will each hold 49 percent stakes in the project.
“The balance 2 percent will be allocated to a financial institution acceptable to both parties,” Deora said.
The board of HPCL, India’s third-largest refining company, approved the deal on Monday.
The total cost of the refinery is estimated at $3.8 billion, Deora said.
HPCL and Mittal will invest $720 million each, while the rest will be raised through debt and equity.