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DEC 20 2012

GAIL insists on right to ADB stake in Petronet

  • Economic Times, ET Bureau / Hyderabad
  • Created: Thu 20th DEC 2012

All four promoters had evinced interest in buying the ADB stake

GAIL is not in favour of letting go its first right to buy the Asian Development Bank's 5.2 per cent stake in Petronet LNG Ltd.

"Our board has not agreed. It is strategically important for GAIL, as a major gas player, to have its position in the LNG value chain and all the infrastructure related to the import and supply of gas. Therefore, GAIL would like to have the stake of ADB. However, this is subjected to the government's approval," said Chairman and Managing Director B C Tripathi, on the sidelines of a Ficci seminar on energy security.

"Besides, we have the first right of refusal. The board has not agreed to forgo the same," he added.

GAIL and three other state-run organisations Oil and Natural Gas Corporation, Indian Oil Corporation and Bharat Petroleum Corporation are the promoters of Petronet LNG, holding 12.5 per cent stake each. France's GDF International ( GDFI), a wholly owned subsidiary of Gaz de France, holds 10 per cent. The remaining equity, 34.8 per cent, is held by the public.

BONE OF CONTENTION

GAIL and three other state-run organisations ONGC, Indian Oil and Bharat Petroleum are the promoters of Petronet LNG, holding 12.5 per cent stake each

All four promoters had evinced interest in buying the ADB stake

GAIL is not in favour of letting go its first right to buy the Asian Development Bank's 5.2 per cent stake in Petronet

Last August, ADB decided to sell its entire stake in Petronet. While the promoters have approved ADB's stake sale, the purchase of the stake by any state-owned company would have to be approved by the Cabinet Committee on Economic Affairs.

All four promoters had earlier evinced interest in buying the ADB stake but the move was blocked by the ministry of petroleum and natural gas, as it would have turned Petronet into a public sector company.

Tripathi, however, rejected the argument, saying despite being a public sector company, GAIL contracted more LNG in 2012 than Petronet. In 2013, Tripathi added, GAIL plans to import 25 cargoes of LNG, against 16 cargoes in 2012.

Recently, Qatar had sought the intervention of the Indian government, asking GAIL (India) to give up its claim on the 5.2 per cent stake of ADB. Qatar Petroleum International wishes to pick up ADB's stake.

Firm in talks to export gas to Pak, adds NW18

Even as India's plans of exporting petroleum products to Pakistan are yet to take off, GAIL is in "serious discussions" to sell natural gas to the neighbouring country, adds NewsWire18 from Mumbai.

"Pakistan is starving of gas and as a confidence-building measure, we want to supply gas to Pakistan... We are in very serious discussions B C Tripathi said on Wednesday at the 2nd National Seminar on Energy Security in Mumbai.

He said the company proposes to expand its pipeline connectivity from Ludhiana to Jalandhar and then to Amritsar, just 28 km from the India-Pakistan border.

Tripathi said once the details are finalised with the Pakistan side, GAIL would approach the government of India for approvals.

He said it is vital for the company to tap newer markets to utilise its pipeline capacity, which is lying idle due to domestic scarcity of natural gas.

Tags

Gas Natural Gas Oil ONGC Energy Security Pakistan Energy Asia Petrol Petroleum Cabinet Committee on Economic Affairs Liquefied natural gas Petronet LNG Ltd Asian Development Bank Mumbai

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