28 March 2019
Oil & Gas
Takeaways from OPaL’s Dahej Plant Visit
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
2016 / 29.3
192 / 128
Financials Snapshot (INR b)
D. Yield (%)
Incorporated in 2006, ONGC Petro additions Limited (OPaL) is a joint venture
(JV) between ONGC (promoter – 49.36%), GAIL (co-promoter – 49.21%) and
GSPC (co-promoter – 1.43%).
The company has set up a 1.9mmtpa (1.1mmtpa ethylene, 0.4mmtpa
propylene and rest is chemicals) petrochemical complex in Dahej, Gujarat.
The complex was commissioned in Mar’17 and built with a total capex of
INR308b (including interest cost of ~INR90b).
The plants are running at ~90% utilization rates in an integrated fashion.
EBITDA margin for the company stands at ~18-20%, with higher domestic
OPaL expects to achieve EBITDA of ~INR15b in FY19, ~INR25b in FY20 (with full
utilization), and ~INR35b after (a) the completion of the Hazira-Dahej Naphtha
pipeline, (b) the exit from SEZ and (c) the completion of other debottlenecking
Shareholding pattern (%)
Dec-18 Sep-18 Dec-17
FII Includes depository receipts
Stock Performance (1-year)
Sensex - Rebased
OPaL was created with an intention of producing value products using ONGC’s
naphtha from Hazira, and ethane, propane and butane from ONGC’s extraction
plant at Dahej.
Dahej complex has a total of eight furnaces, with flexibility of changing
feedstock inputs, base design for 60% naphtha and 40% gases. This gives the
company an advantage of switching between gas and naphtha during periods
of high gas prices (in winter), and vice versa.
Total gas consumption stands at ~5.3mmscmd, with 1.3mmscmd of LNG used
purely for power generation.
Naphtha is majorly sourced from ONGC, while a small amount is also sourced
from BPCL/others. Ethane is majorly sourced from ONGC’s extraction plant, and
a small quantity (less than 10%) from RIL.
The company can boost its utilization up to ~120%, with certain
debottlenecking and process improvement.
OPaL commands ~13% of the domestic market share, with ~32 domestic
The products are exported to 20+ countries. Around two thirds of exports are
to China with the help of ~13 global partners.
Chemicals form the majority of exports, with py-gas (via Hazira) and benzene
(Pipavav) exports at 100% each and butadiene (Kandla) exports at 60%.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Swarnendu Bhushan – Research Analyst
(Swarnendu.Bhushan@MotilalOswal.com); +91 22 6129 1529
Sarfraz Bhimani – Research Analyst
(Sarfraz.Bhimani@motilaloswal.com); +91 22 6129 1566