Energy giant Royal Dutch Shell is planning to buy 50 percent stake in India’s Nayara Energy’s planned petrochemical project, the media reported.
The deal for Royal Dutch Shell to acquire the stake in the project is expected to cost around $9 billion.
Shell and Nayara – which is part-owned by Russian oil major Rosneft – signed a memorandum of understanding in early June, the media reported.
The project involves the development of a 1.8 million tonnes a year full steam ethylene cracker and linked downstream units. It will be built at Vadinar in western Gujarat, India and would cost between $8 to $9 billion. Reportedly, the whole project would be completed during a period of five years.
According to Nayara’s proposal to the environment ministry, the project will also have an aromatic complex and capacity to produce 10.75 million tonnes of a variety of petrochemicals.
Last month, Shell revealed that it will write off assets worth up to $22 billion as the coronavirus pandemic has severely impacted its business.
According to Shell, the collapse in oil demand as a result of the coronavirus pandemic will drag on global oil prices down for at least three more years.
As a result, it will wipe out billions from the value of its fossil fuel reserves and casting doubt on whether new discoveries will be developed.
Shell further revealed that it expects a 40 percent drop in sales in the second quarter of 2020 from a year earlier to about 4 million barrels per day (bpd), although that is more than its earlier prediction of a drop to 3.5 million bpd.