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IOC-Adani joint venture keen on LNG stake

Business

A newly-formed joint venture of Oil Corp and Adani Energy may take 50% stake in Rs 4,000-crore liquefied natural gas (LNG) import terminal planned by Gujarat State Petroleum Corp (GSPC).

GSPC will hold the remaining 50% stake in the terminal planned for commissioning in 2012. IOC and Adani Energy recently signed an agreement to set up a 50:50 joint venture company for gas distribution. The joint venture company, which is likely to take shape this quarter, will set up city gas distribution projects in Uttar Pradesh, Haryana, Rajasthan, Punjab and Madhya Pradesh for supply of compressed natural gas (CNG) to automobiles and piped natural gas for domestic and industrial use, besides marketing LNG.

GSPCL has already awarded Front End Engineering and Design (FEED) contract for the LNG terminal to Tractabel of Belgium. FEED is likely to be ready by early April, based on which the investment decision will be made. Mundra would be the third LNG terminal in Gujarat. Petronet LNG already operates a 6.5 million tonnes a year LNG import facility at Dahej, while a joint venture of Royal Dutch/Shell and Total of France own a 2.5 million tonnes capacity terminal at Hazira.

Sources said the Mundra terminal is being planned with a capacity of 20 million tonnes. The capacity may be ramped up to 6.5 million tonnes with minor debottle-necking but future additions would be made if there was demand for imported LNG.

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