HPCL to buy 11-15 pc stake in Petronet's east coast terminal
May 21 2014 , New Delhi
"We have a huge gas requirement at our Vizag refinery and naturally it is to our interest that we take a stake in the Gangavaram terminal in Andhra Pradesh," an HPCL official said.
HPCL's Vizag refinery in Andhra Pradesh is being expanded to 15 million tonnes per annum (MTPA) from current 8.33 MT and the expanded unit will have a gas requirement of close to 3 MT.
"We have been in discussion with Petronet... They have told us that 11-15 per cent stake in the project is available which we are keen to buy," the official said.
Years ago, HPCL had missed the LNG bus when it got left out of the PSU consortium that formed Petronet. Indian Oil, ONGC, GAIL and Bhart Petroleum each have 12.5 per cent stake in Petronet.
Last month, Oman's Oil Minister Mohammed bin Hamad Al Rumhy, too, had envinced his nation's interest in buying up to 20 per cent stake in the under-construction terminal.
Petronet, India's largest importer of liquid gas, is building a 5 MTPA LNG terminal at Gangavaram in Andhra Pradesh that is expected to be ready by 2018.
When contacted, Petronet Director (Finance) R K Garg confirmed HPCL's interest.
"We have been in discussions with HPCL but nothing has been finalised so far. Since their Vizag refinery has a requirement for gas, it is good for them if they buy stake and it will be good for us as well as it will give us an anchor customer," he said.
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," he said.
Petronet is looking for strategic partners that can either bring in gas turned into liquid at minus 160 degrees Celsius (liquefied natural gas or 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 MT.
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-MTPA terminal at Dahej in Gujarat, which it plans to expand to 15 MT by 2015. It recently completed building a 5-MT terminal at Kochi in Kerala.