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APR 03 2014

Oman keen to buy 20% stake in Petronet's LNG terminal

  • Economic Times, ET Bureau / Hyderabad
  • Created: Thu 03rd APR 2014

Oman is keen to buy up to a 20 per cent stake in Petronet LNG Ltd's Rs5,000 crore LNG import terminal on the east coast, the nation's oil minister Mohammed bin Hamad Al Rumhy said today.

"We are interested in Petronet. We are looking to invest in one of their projects in east coast. We have not decided on stake. It will be small, maybe 10-15-20 per cent," he said after delivering Petronet's foundation day lecture here.

Petronet, India's largest importer of liquid gas, is building a 5 million tonne a year LNG terminal at Gangavaram in Andhra Pradesh that is expected to be ready by 2018.

"We have been in discussions with Petronet for the past two months," he added. Oman is the largest oil and natural gas producer in the Middle East that is not a member of the Organization of Petroleum Exporting Countries, according to the US Energy Information Administration.

Petronet plans to build its first terminal on the east coast through a subsidiary in which it wants to retain a minimum 51 per cent stake.

"Eight per cent stake has already been taken by Gangaravam Port and we are willing to take strategic partners," Petronet Director (Finance) R.K. Garg said.

Petronet is looking for strategic partners that can either bring in gas turned into liquid at minus 160 degrees Celsius (LNG) or buy a minimum quantity of the imported fuel to be sold in the domestic market.

The company received final approval from its board of directors last year to build a third LNG terminal at Gangavaram, the first on the east coast.

The terminal, with the initial capacity coming on stream in 2018, will have scope to be expanded to 10 million tonnes.

It signed a term sheet with Gangavaram Port for the LNG terminal in 2012, when it also called for bids for leasing an FSRU (Floating Storage & Re-gasification Unit) for 3-5 years to cover the period till the terminal is completed.

Petronet operates a 10 million tonne per annum terminal at Dahej in Gujarat, which it plans to expand to 15 million tonnes by 2015. It recently completed building a 5 million tonne terminal at Kochi in Kerala.

The Kochi terminal operates at 5 per cent of capacity as pipelines to take gas to customers in Karnataka and Tamil Nadu are not ready, Garg said.

The terminal is currently being connected to two main customers - Bharat Petroleum's Kochi refinery and fertiliser firm FACT, which are in the process of converting their facilities to run on natural gas.

Tags

Gujarat Andhra Pradesh Karnataka Tamil Nadu Kerala Southern Region SR Finance Energy Petrol United States Petroleum Organization of Petroleum Exporting Countries Liquefied natural gas Petronet LNG Ltd India SR

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