State-owned Indian Oil Corp (IOC) is in talks to buy 26 per cent stake in debt-laden Gujarat State Petroleum Corp’s (GPSC) almost-completed Rs 4,500 crore Mundra LNG import terminal in Gujarat.
The 5 million tonnes a year import terminal, the third facility in Gujarat for import of natural gas in its liquid form in ships, is nearing completion and GSPC is keen to exit the project completely.
“They offered us all of their 50 per cent stake but we are keen to take 26 per cent for now,” an IOC official said.
With a view to expand its gas business, IOC is keen to buy a stake in Mundra terminal but does not want GSPC to exit the project completely.
IOC, the country’s largest oil company, wants the state government entity to remain as a part of the project for smooth operations, he said.
Gujarat already has a 15 million tonnes liquefied natural gas (LNG) import facility operated by Petronet LNG Ltd at Dahej and another 5 million tonnes terminal of Shell at Hazira. The official said IOC is keen to take half of GSPC stake and wants the Gujarat government entity to keep the remaining 25 per cent. “The stake will however depend on IOC board finding the asking price viable. So far GSPC has not put a value to its stake,” he said.
GSPC LNG - a unit of GSPC - holds 50 per cent interest in the project. Adani Group holds 25 per cent while the remaining 25 per cent is to be bid to a strategic partner, the shortlist of which also included IOC.
It will be selling the LNG terminal together with storage and re-gasification facilities over an area of 28 hectares on the coast.
India Gas Solutions Pvt Ltd -- the equal joint venture between the Mukesh Ambani-led Reliance Industries and Europe’s second largest oil firm BP -- and state-owned Oil and Natural Gas Corp (ONGC) are the other two firms shortlisted to pick up 25 per cent stake earmarked for the strategic partner in the project.
Initially, eight firms including state gas utility GAIL India had expressed interest to buy the stake but only three were finalised. Essentially, GSPC was looking at a partner which can bring in LNG or consume the imported liquid gas, sources said. While BP is a producer and trader of LNG, RIL’s twin refineries at Jamnagar in Gujarat as well as its large petrochemical plants are huge consumers of gas. ONGC also is a big consumer of the fuel.