The Telegraph
Saturday , May 3 , 2014
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Qatar leads in Petronet stake race

New Delhi, May 2: The sovereign wealth fund of Qatar is emerging as a prime contender for the 5.2 per cent stake of the Asian Development Bank in the country’s natural gas importer Petronet LNG Ltd.

India is keen that the stake sale results in additional gas at a lower price.

“There are a lot of people interested in buying the stake. Sovereign wealth funds of Qatar, Abu Dhabi and Oman as well as multinationals such as Mitsui are all interested besides some private equity investors,” industry sources said.

ADB had in 2011 decided to sell its 5.2 per cent stake in Petronet but could not go ahead as the promoter PSUs such as gas utility GAIL refused to waive off their first right of refusal.

However, GAIL India has now agreed to waive the right if Qatar delivers an additional two million tonnes of LNG at a lower price.

Petronet currently buys 7.5 million tonnes (mt) per annum of LNG from Qatar's RasGas under a long-term contract and buys another 2.5mt under spot and short-term deals as needed.

Sources said the Qataris were interested in the deal as they would be in a position to leverage their stake to secure a market for their LNG in the long-term.

Gas demand in the country is expected to rise to 473 million cubic metres a day (mmscmd) by 2016-17 up from 286 mmscmd in 2012-13.

Initially, all the four state-owned promoters — IOC, ONGC, GAIL and BPCL — were interested in buying ADB’s stake, but the Petronet management was opposed to the move as it would have led to PSU holding crossing 50 per cent, turning the LNG importer into a government concern.

Petronet is registered as a private company even though public sector oil companies hold 50 per cent stake and the oil secretary is its chairman.

IOC, ONGC and BPCL later decided not to pick up a stake and waived off their pre-emption right, or right of first refusal, under pressure from the oil ministry.