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IndianOil, GAIL take 49% stake in Adani’s Rs 6,000-cr LNG project

BY PTI22 Sep 2016 10:57 PM GMT
<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">State-owned refiner Indian Oil Corporation (IOC) and gas utility GAIL India Ltd on Wednesday signed pacts to take 49 per cent stake in Adani Group’s Rs 6,000-crore Dhamra LNG project in Odisha. IOC will initially take 39 per cent and GAIL another 11 per cent equity in <g data-gr-id="86">Dhamra</g> LNG Terminal Pvt Ltd and the remaining 50 per cent will be with Adani Group.
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<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">“Going forward, IOC and Adani Group will each divest 1 per cent of their respective stake to a credible <g data-gr-id="89">financialinstituion</g> which will then have 2 <g data-gr-id="90">per cent</g> stake in the terminal,” IOC Chairman B Ashok said at the MoU signing ceremony. The 5-million tonne a year liquefied natural gas (LNG) import terminal is targeted to be built by 2020.
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<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">“Apart from equity, IOC and GAIL intend to book regasification capacity of 3 and 1.5 million <g data-gr-id="102">tons</g> per annum respectively in the terminal,” he said. Gas imported at the terminal would feed IOC’s three oil refineries at Barauni in Bihar, Haldia in West Bengal and Paradip in Odisha. 
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<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">Also, it will supply feedstock to fertiliser plants at Barauni, Sindri and Gorakhpur. Pipelines will be laid to connect the port with the anchor customers. “The natural gas from the terminal would also be supplied to various city gas distribution networks in the eastern India,” he said.
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<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">The LNG terminal and the 2,539-km Jagdishpur-Haldia- Bokaro-<g data-gr-id="91">Dhamra</g> pipeline, being built at a cost of Rs 12,940 crore, will usher in <g data-gr-id="119">second</g> green revolution in eastern India, Oil Minister Dharmendra Pradhan said.
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<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">The pipeline would bring gas to eastern Uttar Pradesh, Bihar, Jharkhand, West Bengal and Odisha and help in their economic development, he said.
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<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">Equity in the Adani terminal follows GAIL dropping plans in March last year to set up a floating LNG import terminal at Paradip. IOC too had in 2012 signed <g data-gr-id="110">an MoU</g> with <g data-gr-id="84">Dhamra</g> LNG Port Corp Ltd (DPCL) to develop an LNG terminal at the port. After shelving their respective plans, the firms in May last year signed <g data-gr-id="111">pact</g> with <g data-gr-id="85">Dhamra</g> LNG Terminal Pvt, a firm owned by Adani Enterprises.
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<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">When asked why the state-owned firms dumped their own projects and choose to go with a private firm, Pradhan said their individual plans were not viable and so the two decided to join hands to set up an LNG terminal.<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">
<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">The <g data-gr-id="87">Dhamra</g> LNG terminal project and the pipeline project cumulatively is expected to bring investments to the tune of Rs 51,000 crore into the economy of eastern India, he said. “About Rs 13,000 crore will be spent on the Jagdishpur- Haldia-Bokaro-<g data-gr-id="88">Dhamra</g> pipeline and Rs 6,000 crore on the LNG project.<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;"> 
<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">Another Rs 6,000 crore on city gas distribution projects in seven cities of Varanasi, Patna, Ranchi, Jamshedpur, Kolkata, Bhubaneshwar and <g data-gr-id="93">Cuttak</g> and Rs 26,000 crore on <g data-gr-id="116">revival</g> of Gorakhpur, Barauni, <g data-gr-id="94">Sindhri</g> and Talcher <g data-gr-id="95">fertilizerunits</g>,” he said.<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">
<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;"><g data-gr-id="92">Dhamra</g> will be the sixth LNG project announced on the east coast. While GAIL has dropped plans of a 4-mt project at Paradip, Petronet LNG, a firm in which GAIL and IOC are promoters, has shelved plans to set up a 5-mt a year LNG import facility at Gangavaram in Andhra Pradesh. GAIL, along with GdF and Shell, has proposed a 3.5-mt floating LNG terminal at Kakinada while IOC is building a 5-mt facility at Ennore in Tamil Nadu.
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<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">Real estate player Hiranandani Group is looking to set up a Rs 2,400-crore, 4-mt floating LNG import terminal off Haldia in West Bengal.<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">
<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">With GAIL, which owns and operates bulk of the nation’s cross-country pipelines, and IOC, whose refineries are a big user of gas, joining <g data-gr-id="82">Dhamra</g>, the fate of LNG terminals in Andhra Pradesh is uncertain. 
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<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;"><g data-gr-id="83">Dhamra</g> can meet all of the demand in Odisha and Andhra Pradesh.<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">
<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">Dhamra port in Bhadrak district of Odisha is an all- weather deep water port, sources said. GAIL in October 2013 had signed <g data-gr-id="121">an MoU</g> with the Paradip Port Trust for setting up of the LNG import terminal.<div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;"> <div style="color: #444444; font-family: "Segoe UI", Verdana, Helvetica, sans-serif; font-size: 14px; background-color: #ffffff;">While the port was to invest Rs 650 crore in breakwater and dredging, GAIL was to invest Rs 2,458 crore for the 4-mt terminal which can be expanded to 10 mt. The plan was, however, dropped in March last year. 

PTI

PTI


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