Mumbai: The sanctions imposed by the European Union and the United States are beginning to impact Nayara Energy’s engineering, procurement and construction (EPC) work, according to people with knowledge of the development.
In the past month, two companies-France’s Technip Energies and Indonesia’s PT Timas Suplindo-have decided to stay away from EPC tenders of Nayara Energy, they said.
Queries emailed to Nayara Energy, PT Timas Suplindo and Technip Energies did not elicit any response till press time.
Technip Energies could have been one of the players for the front-end engineering design for Nayara Energy’s polypropylene segment, but instead decided to stay away from it, said one of the persons cited earlier, who did not wish to be identified.
EPC contractor PT Timas Suplindo is reportedly staying away from installing a single point mooring system and pipelines for Nayara Energy’s 20 million tonnes per annum refinery in Vainer, Gujarat.
“Sanctions have impacted the EPC work for Nayara,” said an industry executive, adding that the Mumbai-based company might now look for EPC players domestically as well as from other regions to complete the work.
On July 18, the EU slapped sanctions on Russia, including restrictions on imports of fuels refined from Russian crude, slashing the price cap on Russian oil to $47.6 per barrel, from $60 currently, and targeting the shadow fleet involved in its transport. The price cap is effective from September 3.
Separately, the US has levied tariffs on Indian imports, accusing India of funding Russia’s war on Ukraine through its oil purchases.
Though Nayara Energy is not directly sanctioned, it is impacted as Russia’s national energy firm Rosneft PJSC holds a 49.13% stake in the company.
Rosneft and a consortium of international investors, Trafigura and UCP, acquired Essar Oil’s 20 million tonnes per annum complex refinery from Essar Energy Holdings and its affiliates in August 2017 for $12.9 billion.
Nayara Energy’s refinery has embarked upon a ₹70,000 crore ($8 billion) investment in the long-term across petrochemicals, ethanol plants and marketing infrastructure expansion, among other projects.
The company is setting up a 1.5 million tonnes per annum ethane cracker at its refinery.
Japan’s Toyo Engineering is the project consultant for Nayara Energy’s petrochemical project.
Nayara Energy has invested more than Rs 14,000 crore since August 2017 in various projects in India, including upgrading existing refining facilities, investing in a new petrochemical plant and other new infrastructure projects.
