NEW DELHI, Feb 20: Steel magnate Lakshmi Mittal will invest $720 million for a 49 per cent stake in a refinery to be run by India's state-run Hindustan Petroleum (HPCL), the government said on Tuesday.

“Mittal Investment and HPCL will hold 49 per cent stake each in the refinery,” Oil Minister Murli Deora was quoted as saying by the Press Trust of India.

The remaining two per cent of the proposed 180,000-barrel-per-day refinery in north India will be offered to financial institutions, Deora said.

Last year, Britain's oil giant British Petroleum abandoned efforts to build a refinery with HPCL in Punjab state after signing a letter of intent in 2005.

Media reports said that BP later deemed the deal unattractive.

The HPCL board had on Monday cleared the joint venture for the refinery, which is likely to be commissioned by the end of 2010.

Mittal will use the family's investment arm, which is part of the same group as the world's largest steelmaker Mittal Arcelor, as the company represented in the deal, Deora said.

Mittal Investments already has a partnership with the state-run Oil and Natural Gas Corporation for oil exploration.

HPCL is the second-biggest oil refining and marketing company in India with a turnover of $14.7 billion.

It has coastal refineries near the financial hub of Mumbai and in the southeast port city of Vishakhapatnam—AFP