"The equity partnership in Bhatinda refinery has been decided. HPCL and Mittal will hold 49 per cent stake each, while 2 per cent will be given to financial institutions," Petroleum Minister Murli Deora told PTI.

Mittal succeeded after a series of potential joint venture partners HPCL has had for the Bhatinda refinery. BP Plc of UK walked out of the project in March 2006. Earlier, Saudi Aramco of Saudi Arabia had exited the project in 1998.

HPCL-Mittal combine would lay a 1,100-km crude oil pipeline from Mundra port in Gujarat to Bhatinda and build a crude oil terminal and associated facilities at an estimated cost of $600 million.

The approval of the Foreign Investment Promotion Board and Cabinet Committee on Economic Affairs are pre-requisites to the formation of the joint venture as both the companies would invest over Rs 1,000 crore (Rs 10 billion). HPCL has already invested about Rs 500 crore (Rs 5 billion) in the Bhatinda project.

In the event of a possible divestment or relinquishment of stake by HPCL, Mittal Investment will have the option to buy the shares held by HPCL at a price determined by experts.

Mittal Investments is wholly owned by the Mittal family and is registered in Luxembourg. It holds 38 per cent in Mittal Steel Company, the Netherlands-based flagship company of the L N Mittal Group.

Should Mittal Investment decline, then the shares can be sold to a third party. Further, if Mittal Investments decides to divest their shareholding, then HPCL has the Right of First Refusal on the shares through a similar mechanism.