The National Monetisation Pipeline (NMP) initiative is kick-starting now with the Indian Oil Corporation Limited (IOCL) putting up two of its big Hydrogen Generation Units for monetisation by global firms.
The Narendra Modi government had launched the NMP initiative for public sector enterprises on August 23. The IOCL group, which owns and operates 11 refineries, saw two of its Hydrogen Generation Units at IOCL’s Gujarat refinery identified for monetisation. The IOCL has invited a global Expression of Interest (EOI) for the same on Thursday (September 30).
On September 28, it was reported that the government is also planning to set up a National Land Monetisation Corporation (NLMC) under the Department of Public Enterprises (DPE) to fast track monetisation of land and non-core assets of Central Public Sector Enterprises.
What the EOI says
The EOI floated by IOCL on September 30 says it is seeking a global or domestic bidder engaged in operating such assets for a transaction involving transfer of contractual rights or long-term lease along with operation and maintenance. “A suitable structure for monetisation would be decided by IOCL at an appropriate stage after considering various factors,” the document reviewed by News18 says.
IOCL has specified that the bidder “should be capable of bringing in operational efficiencies, higher reliability, increased capacity availability, apart from an appropriate upfront capital payment related to the transaction”. It has also been specified that the ownership of the land on which the assets are located “will remain with IOCL”. The bidder will produce hydrogen to meet the refinery’s demand.
IOCL’s Brief to Bidders
The NMP identifies two broad models of monetisation — Direct Contractual Approach and Structured Financing. “For the purpose of this transaction, the direct contractual approach will be applicable,” the IOCL document says. Both these IOCL units are licensed from M/s Haldor Topsoe and were commissioned in 2010 and 2021, respectively, with capacity of 72.5 kTPA each, the document says.
The bid document also adds that an Indian bidder or a foreign bidder,, who has an Indian entity to own and operate the assets, or even a consortium or joint venture of such firms can bid for the project. It also says the bidder should have built, operated and maintained at least one hydrogen generation unit of minimum 30 kTPA capacity. This apart, industrial gas generation must be the bidder’s primary business, and with a net worth of Rs 1200 crore.
IOCL is among India’s largest commercial enterprises with a turnover of Rs 5,14,890 crore and accounts for nearly half of India’s petroleum products market share. IOCL group owns and operates 11 refineries with a combined refining capacity of 80.55 MMTPA (million metric tonnes per annum).