KOLKATA (miningweekly.com) – Indian Oil Corporation (IOC), the country’s largest oil refiner-marketer, will be willing to offer a strategic equity stake to overseas investors in its liquefied natural gas (LNG) terminal ready for commissioning at the end of this month.
IOC in a statement said that construction of the LNG import terminal entailed an investment of about $736-million to complete, and LNG cargo ships would start arriving this month-end.
The five-million-ton-a-year LNG terminal, located at Ennore in the southern state of Tamil Nadu, has been built by IOC, but now that it is on the verge of commercial operations, the oil refiner-marketer is willing to offload a minority equity stake to overseas investors.
Among the initial proposals received to pick up a stake in the Ennore LNG terminal were Malaysian State-controlled Petronas and even a crossholding option could be explored by Petronet LNG, in which IOC holds 12.5% equity.
IOC is aggressive in building imported LNG terminals in view of India’s rising consumption of natural gas, but company officials said that the oil refiner marketer was having second thoughts about investing in a terminal located at Mundra, in the western state of Gujarat.
Almost a year ago, IOC had announced that it was keen on picking up 50% equity in the Mundra terminal project along with Adani Enterprises and Gujarat State Petroleum Corporation (GSPC) involving total investments of about $714-million.
There was no official confirmation available for the cause of IOC pulling out the Mundra project, but sources said the decision to pull out stemmed from certain questions that cropped up in the course of conducting the due diligence of the terminal.
The Ennore terminal will have captive buyers among Chennai Petroleum Corporation, a subsidiary of IOC, Madras Fertilizers, Manali Petrochemicals and Tamil Nadu Petroproducts.
Sources said that supply for 1.5-million tons of LNG has already been contracted with various consumers from the Ennore terminal.