India's ONGC Petro-additions Ltd. plans to sell a stake to foreign firms that can sell products from its under-construction petrochemical plant to markets in China, South East Asia, Israel and Turkey, its chief executive said Monday.

ONGC Petro-additions, or OPaL, is currently in discussions with foreign firms including Japan's Itochu Corp. (8001.TO), LyondellBasell Industries and Ineos PLC to sell up to a 25% stake in the company, P.K. Johri told Dow Jones Newswires in an interview.

"By December this year, we will take a final decision on the partners. We want to sell the 25% interest between two to three companies," Johri said. The 25% stake is worth about INR9 billion at par, but the company is expecting to sell at a premium, he said.

OPaL will commission the INR120-billion ($2.4 billion) plant on schedule by the end of 2012, even though the global economic slowdown has pushed several projects off track, he said.

"We're expecting the next upswing in the petrochemical cycle by the end of 2012, and we want to be ready to catch that upswing," Johri said.

The global financial slowdown, amidst falling oil prices, has hurt the demand for petrochemicals, ending the recent boom in the sector and forcing companies to defer or scrap projects.

OPaL is counting on faster-growing economies like China and India as well as markets in neighboring South Asian countries to sell products from the two-million-metric-ton-a-year plant.

"Initially we'll export close to 60% of our product and sell the remaining here (in India)," he said. "China will be our main target market. China is also increasing production capacity, but even a small market share there will be significant for us."

The strategic partners are likely to get the first right of refusal over the products from the plant, Johri said.

Oil and Natural Gas Corp. (500312.BY), which holds a 26% stake in OPaL, will supply natural gas and about 1.5 million tons of naphtha a year to the project, he said.

ONGC, India's largest oil producer, has agreed in-principle to give state-run Gail India Ltd. (532155.BY) a 19% stake in OPaL for nearly INR7 billion, he said.

OPaL will also launch an initial public offering of its shares to sell a 25% stake by the end of 2012, he said.

It plans to raise more than INR80 billion in long-term borrowing by April to fund the project, Johri said.

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