Mohammed bin Hamad al Rumhy and Indian minister of state for oil Lakshmi Panabaka in New Delhi on Wednesday. (PTI)
New Delhi, April 2: Oman is planning to buy up to a 20 per cent stake in the Rs 5,000-crore LNG import terminal being set up by Petronet on the east coast.
“We are interested in Petronet. We are looking to invest in one of their projects in the east coast. We have not decided on the stake. It will be small, maybe 10-20 per cent. The stake could be bought through an investment or pension fund,” the Gulf nation’s oil minister Mohammed bin Hamad al Rumhy said here today.
This is Petronet’s third LNG terminal in the country and the first on the east coast.
“Petronet’s track record in the terminal business is attractive. There are synergies (as well). The two sides had been engaged in talks for the past two months,” he said.
Petronet is looking for strategic partners that can either bring in liquefied natural gas (LNG) or buy a minimum quantity of the imported fuel to be sold in the domestic market.
Oman is likely to gain by entering into a long-term LNG supply contract if the deal goes through. Petronet can also benefit from steady supplies to meet rising gas demand from refiners, petrochemical and power projects that are running plants below capacity because of a shortfall in domestic gas output.
Oman is the largest oil and gas producer in West Asia. It is not a member of the Organization of Petroleum Exporting Countries (Opec).
LNG importers are already ramping up their processing capacity to meet the rising demand. Petronet plans to more than double its capacity to 25 million tonnes (mt) a year within a few years from 10mt.
Petronet’s 5mt-a-year terminal at Gangavaram in Andhra Pradesh is expected to be ready by 2018. The company plans to build it 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.
The company had signed a term sheet with Gangavaram Port in 2012, when it also called for bids to lease a floating storage and re-gasification unit for 3-5 years to cover the period till the completion of the terminal.
Petronet operates a 10mt-per-annum terminal at Dahej in Gujarat, which is likely to be expanded to 15mt by 2015. It has recently completed a 5mt terminal at Kochi in Kerala.