Tata firm to buy 10% stake in Nikhil Merchant’s Rs 5,900-crore LNG project
In the first investment decision since N Chandrasekaran named as the Tata Group chief, Tata Realty and Infrastructure Ltd is taking 10 per cent stake in a Rs 5,900-crore floating LNG import terminal being set up by Nikhil Merchant-led Swan Energy in Gujarat.
This will be the first investment by Tata Group in gas business.
Tata Realty and Infrastructure (TRIL), which was set up in 2007 to pursue opportunities in the real estate and infrastructure sectors, is a wholly-owned subsidiary of Tata Sons, the holding company of the Tata Group.
In a stock exchange filing, Swan Energy said it has “received an Expression of Interest (EOI) from Tata Realty and Infrastructure Ltd, showing its willingness to invest up to 10 per cent of the equity” Swan LNG Pvt Ltd -- the company setting up the Floating and Regasification Unit (FSRU) near Jafrabad in Gujarat. Ahead of the move, the authorised share capital of Swan LNG Pvt Ltd “has been increased from Rs 5 lakh to Rs 2,000 crore,” Swan Energy said in a separate filing.
At par value, Tata investment will cost Rs 200 crore.
Last week, Tata Consultancy Services Ltd (TCS) Chief Executive Officer Natarajan Chandrasekaran was named the next chairman of Tata Sons Ltd. He came in place of Cyrus Mistry who was unceremoniously ousted in October last year. On Swan’s LNG project, Gujarat government had picked 26 per cent equity the LNG project.
The Gujarat government participation in the project was through Gujarat State Petronet Ltd and Gujarat Maritime Board jointly.
State-owned Oil and Natural Gas Corp (ONGC), Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) have already booked 60 per cent of the capacity of 5 million tonnes a year LNG terminal.
The three firms have signed an agreement to import 1 million tonnes per annum of their own liquefied natural gas (lng) at the Swan terminal. Gujarat State Petroleum Corp Ltd (GSPC) too is in talks to take 1.5 million tonnes capacity in the FSRU. The companies hiring the capacity will bring their own LNG from abroad and pay Swan a tolling fee.
Swan Energy is building the project in joint venture with Exmar of Belgium, which holds 38 per cent stake in the project.
Swan is targeting 2019 for commissioning of the one jetty-moored FSRU at Jafrabad. It plans to expand the capacity to 10 million tonnes through the deployment of a second FSRU.
Last month, Swan had in a regulatory filing stated that it has signed an MoU with Petronasr and Alpha Energy Ltd for development of 20 trillion cubic feet Sephied Baghun gas field in Iran at an investment of USD 615 million.
The project, besides involving constructing infrastructure necessary to put the field into production, would also involve building an offshore gas liquefaction facilities (OLNG) that will convert the gas into its liquid form (LNG) for transporting it in ships to consumption centres.
“Swan will offtake around one million tonnes per year of LNG produced by the OLNG, which will be delivered to the FSRU built by Swan in Gujarat,” it had said on December 14.