Bayernoil Faces Delay in Dismantling Refinery to Ship to India

By Nicholas Comfort

Nov. 23 (Bloomberg) -- The dismantling of a 44-year-old German refinery for shipment to India has been delayed by about a year after financial markets tightened and the buyer, Cals Refineries Ltd., couldn’t raise necessary funds.

Bayernoil Raffinerie GmbH’s 90,000 barrel-a-day facility in Ingolstadt should be taken apart fully by the third quarter of 2010, Managing Director Michael Raue said in a phone interview today. Talks with the Indian company have recently advanced, he said, without elaborating.

The German refiner, a joint venture of four European oil companies, sold the Ingolstadt facility to cut output as consumption of oil products wanes in its home market. Cals has said demand for refining capacity make buying an existing plant and shipping it to India more practical than building a new one.

“Their funding was mowed down by the financial crisis,” said Raue. “It cost about a year.”

Some parts of the plant have already been disassembled, and scanning with lasers to create a three-dimensional map of the refinery has been conducted, the managing director said. He declined to comment on when the facility could be reassembled at the Cals site in Haldia, India.

Vishal Rastogi, an investor relations spokesman for Cals, didn’t immediately respond to an e-mail seeking comment and a call to his office went unanswered.

Bayernoil is concentrating on two other sites as it expects German oil consumption to sink as efficiency measures mean consumers opt for fuels such as diesel over gasoline. The joint venture has three refineries within about 5 kilometers (3 miles) from the center of Ingolstadt, a town in Bavaria where luxury carmaker Audi AG is based.

Bayernoil uses crude from Africa, Venezuela, Norway and Saudi Arabia. OMV AG of Austria owns 45 percent of Bayernoil, according to the company’s Web site. Agip Ltd. owns 20 percent, Ruhr Oel GmbH 25 percent and BP Plc 10 percent.

Lohrmann International GmbH said last year that it oversaw the sale to Cals and is charged with dismantling and shipping the Ingolstadt refinery.