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State-owned Indian Oil Corp (IOC) will hold 45 per cent stake in the planned Rs. 5,150 crore LNG import terminal at Ennore in Tamil Nadu and offered 50 per cent interest to financial institutions like ICICI and IDFC.
“We have reserved 50 per cent stake in the 5 million tons a year liquefied natural gas (LNG) import project for strategic partner. Till we get a strategic partner, we have decided to get financial institutions onboard to achieve financial closure,” a company official said.
A joint venture company is being incorporated for setting up of the project. IOC would hold 45 per cent stake in the company while Tamil Nadu government enterprise, TIDCO will have 5 per cent holding. Balance 50 per cent will be for a strategic partner like LNG supplier, the official said, adding that the project will be completed by 2019.
Till a strategic partner is roped in, ICICI and IDFC have agreed to hold 50 per cent interest. “The joint venture company will be initially incorporated with a seed capital of Rs. 1 lakh... of which IOC’s investment would only be Rs. 45,000 at present,” he said.
As the project activities progress, the strategic joint venture partners would be identified and inducted as equity partners.
Ennore will be the third LNG terminal on the east coast with state-owned GAIL India Ltd building a facility at Kakinada in Andhra Pradesh and Petronet LNG Ltd proposing a 5 million tons facility at Gangavaram in Andhra Pradesh.
India currently has four LNG import terminals, all on the west coast — Dahej and Hazira in Gujarat, Dabhol in Maharashtra and Kochi in Kerala.
LNG is a gas that is cooled down to liquid form and takes up just 1/600th of the volume in its gaseous state, thereby easing transportation by sea.
The official said IOC will lay a 1,175 km of pipelines to transport the gas imported at Ennore LNG terminal to customers.
The company has made an application to sector regulator Petroleum & Natural Gas Regulatory Board (PNGRB) for laying natural gas pipeline from Ennore to Nagapattinum in Tamil Nadu with spurlines to Madurai, Tuticorin and Bengaluru.
IOC is talking to half a dozen LNG suppliers including Gazprom of Russia for long-term supplies. UK-based Foster Wheeler is project consultant for the Ennore terminal.
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