State oil giant Saudi Aramco is planning to enter the Indian hydrocarbon sector in a big way with the acquisition of a major stake in a mammoth $3.24 billion petrochemicals project in Gujarat, said a report.

The world's biggest oil producer is in crucial talks with ONGC Petro additions Ltd (OPaL) for a 30 per cent stake and a management role in the grass root mega petrochemical project at Dahej in Gujarat, reported the Times of India.

OPaL, a private joint venture company was incorporated in 2006, by Oil and Natural Gas Corporation (ONGC) and Gujarat State Petroleum Corporation (GSPC), with 26 per cent and 5 per cent stakes respectively. Later, Gas Authority of India Limited (GAIL) also acquired a 19 per cent stake in OPaL.

The project, being built by OPaL, will be commissioned by mid-2014 and will have an annual capacity to produce 1.1 million tonnes of ethylene.

The dual feed cracker will use naphtha from ONGC's Hazira complex and gas from its extraction plant at Dahej in Gujarat.

Private shareholding through a mix of strategic stake sale and public offering would be about 50 per cent in OPaL, while state-run companies would hold the remainder, said KS Jamestin, a director at ONGC and OPaL, said. OPal also plans to launch a public offering in 2015, he said.

Prior to this, ONGC was negotiating with Kuwait Petroleum. However, the discussions were called off due to differences over price.

"We have engaged Ernst & Young as our adviser. They are in talks with several companies across the world and Saudi Aramco is just one among them," revealed Jamestin.

"If the offer is good we won't mind giving more than 25 per cent ... somebody who brings in value in terms of their expertise in certain terms of the project like marketing, innovation like that," he said.

The proposed deal, currently at an advanced stage, will be mutually fruitful as Middle-East oil suppliers are looking for closer links in large Asian markets, with the American continents likely to depend less on crude oil imports as domestic shale production and deep-sea oil and gas output pick up, the report stated.

Aramco's proposed entry into India and joining hands with state-run ONGC in an equity alliance are significant developments for the country's hydrocarbon sector, which has also attracted global majors BP and BG, it added.-Reuters and TradeArabia News Service