Although Nayara Energy faces no direct sanctions, it is facing heat due to Russian state energy corporation Rosneft PJSC’s 49.13% ownership stake in the organisation. (AI image)
Nayara Energy, India’s second largest private oil refinery, is facing fresh trouble from the impact of US, EU sanctions. Although the Russia-backed Nayara Energy faces no direct sanctions, it is facing heat due to Russian state energy corporation Rosneft PJSC’s 49.13% ownership stake in the organisation.According to an ET report, the sanctions implemented by the EU and US have started to affect Nayara Energy’s engineering, procurement and construction operations.In a separate development, the United States has imposed duties on goods from India, claiming that India’s Russian oil procurement helps finance Russia’s military operations in Ukraine.Also Read | ‘Funny that pro-business administration accusing…’:India’s clear message to US on buying Russian crude oil, trade deal ahead of Trump’s 50% tariffsIn August 2017, Rosneft along with an international investment consortium comprising Trafigura and UCP purchased Essar Oil’s sophisticated refinery, with a capacity of 20 million tonnes annually, from Essar Energy Holdings and its associated entities for $12.9 billion.
Nayara’s EPC operations hit
Within the last month, two firms have withdrawn from Nayara Energy’s EPC tender process: Technip Energies from France and PT Timas Suplindo from Indonesia, sources indicated to the financial daily.A source, speaking on condition of anonymity, revealed that Technip Energies could have participated in the front-end engineering design for Nayara Energy’s polypropylene unit but opted against involvement.Reports indicate that EPC contractor PT Timas Suplindo has declined involvement in the installation of a single point mooring system and pipelines at Nayara Energy’s 20 million tonnes yearly refinery located in Vainer, Gujarat.“Sanctions have impacted the EPC work for Nayara,” a senior industry official explained, noting that the organisation based in Mumbai could now explore domestic EPC contractors and those from alternative regions to finalise the project.The European Union imposed sanctions against Russia on July 18, which included limitations on Russian-refined fuel imports, reducing the Russian oil price ceiling to $47.6 per barrel from the existing $60, whilst also focusing on the informal fleet engaged in its transportation. The revised price ceiling takes effect from September 3.Also Read | ‘We have red lines…’: Jaishankar’s clear message on India-US trade deal; slams ‘sanctions’ on Russia oil, says ‘if you don’t like it, don’t buy it’Nayara Energy has initiated a comprehensive long-term investment programme valued at ₹70,000 crore ($8 billion), encompassing developments in petrochemicals, ethanol production facilities, and expansion of marketing infrastructure, alongside other initiatives.The organisation is constructing an ethane cracker facility at its refinery site with an annual capacity of 1.5 million tonnes.The petrochemical development project at Nayara Energy has engaged Toyo Engineering from Japan as its consulting partner.Since August 2017, Nayara Energy has allocated over Rs 14,000 crore towards various Indian ventures, including the enhancement of current refining capabilities, development of a new petrochemical facility, and additional infrastructure projects.
