Page 52 - Plastics Nuews October 2017

BuSINESS NEWS

Viability gap funding for Reliance Industries Sells

Gujarat’s petro project, likely Marcellus Shale Assets For

to have CICET $126 Mln

he Union Minister for eliance Industries said it had signed agreements
TChemicals and Fertilisers Rto sell all of its interest in certain upstream assets
Ananth Kumar has offered in north-eastern and central Pennsylvania, known as
financial support from the Central Marcellus shale.
treasury through Viability-Gap The assets, which are currently operated by Carrizo
Funding (VGF) for the success of Oil & Gas, Inc., were sold to BKV Chelsea, LLC, an
affiliate of Kalnin Ventures LLC, for consideration
ambitious project of Petroleum
of $126 million, subject to customary closing terms
Chemicals and Petrochemicals and conditions. “Additionally, Reliance could receive
Investment Region (PCPIR) at contingent payments of up to $11.25 million in
Dahej in Gujarat while speaking at the fifth edition aggregate based on natural gas prices exceeding
of India CHEM Gujarat 2017. Looking at the dismal certain thresholds over the next three years,” the oil
participation of the processing units at the PCPIR in Dahej, and gas company said.
Kumar asked Gujarat to submit a proposal for VGF from The assets produce mainly gas and are located in
the Centre. “Dahej PCPIR produces 2 million tonnes of Susquehanna, Wyoming and Clearfield Counties of
raw material or intermediaries. But only 800,000 tonnes Pennsylvania. Walter Van de Vijver, President and
is consumed directly. CEO of Reliance Holding USA, Inc., commented that:
“This transaction represents an opportunistic sale
I assure you, if you ask for VGF, the Centre will consider it of developed upstream Marcellus assets and ends a
favourably,” Kumar said, adding that there is a potential successful partnership of 7 years with Carrizo in a
to create employment opportunity for 800,000 by 2040 joint sale. We will continue to actively manage the
in the region. Kumar also announced India’s first Central remainder of our US shale resources.” The Carrizo
Institute of Chemical Engineering and Technology (CICET) operated acreage was one of the three upstream
to be set up at Dahej on the similar lines of CIPET for assets in the USA, owned by Reliance. Reliance remains
invested in the Marcellus shale play via its non-operated
plastics sector, to facilitate skill development in the position with Chevron in southwestern Pennsylvania
chemicals sector. Highlighting the emerging need of talent and in the Eagle
for chemicals processing in the country, Kumar said: “The Ford play via its
Central government has planned to set up a specialised non-operated
institute on the lines of Central Institute of Plastics position with
Engineering and Technology (CIPET) for skill development Pioneer in Texas.
in chemicals sector. The sale of the
assets will be
This (CICET) will be country’s first specialised institute on consummated in
chemicals and it will be set up at Dahej. We will send a accordance with
formal proposal to Gujarat for land requirement of about the terms of a
10-15 acres and the infrastructure support.” Gujarat Chief purchase and sale agreement, dated October 5, 2017,
Minister Vijay Rupani assured support for setting up of by and between Reliance and the buyer, the company
said. The transaction is anticipated to close by the end
CICET. According to Rupani, Gujarat currently has over of the third quarter of FY2018, with an April 1, 2017
16,000 small and medium enterprises and more than 500 effective date. Citigroup Global Markets, Inc. acted
medium-to-large units in the chemicals sector, producing as financial advisor to Reliance, Haynes and Boone
about 6,500 types of chemicals and petroleum products. served as its legal counsel.

Plastics News | Octob er 2017 52