The Hindu Business Line : GSPC firms up plans for LNG terminal at Mundra

Kolkata, May 22 Gujarat State Petroleum Corporation (GSPC) has firmed up plans to set up a 7.5-million-tonne LNG terminal in joint venture at the Adani group-managed Mundra port. GSPC will hold 50 per cent controlling stake in the Rs 3,000-crore project. The Adani group will pick up 25 per cent participatory stake. The terminal is expected to be commissioned in 2012.

Though GSPC has offered the residual 25 per cent stake in the joint venture to Essar, which is a major user group of natural gas, a decision on the same is pending. If Essar does not participate in the project, as is apprehended by industry sources, the venture may offer the same for public participation through an IPO.

“We have firmed up plans to set up the LNG terminal at Mundra. On behalf of the Gujarat Government, GSPC will be the main promoter. Adani Group has agreed to participate in the project. We hope to freeze the shareholding structure and incorporate the joint venture in next few months,” a GSPC source told Business Line. The company has already taken steps to obtain environmental clearance for the terminal.

On Essar’s participation, the source said: “Essar will be considered as a key business partner, even if it does not join the venture.” When contacted, an Essar spokesperson said: “We are interested in LNG sector and are considering various options. However, we are still in discussion mode.” Sources in the Adani group confirmed its participation in the project.

It may be mentioned that GSPC had previously entered into two different MoUs wilth Adani and Essar for LNG terminalling at Mundra and Pipavav in Gujarat. As things emerge now, GSPC has finally settled for Mundra.

In talks for sourcing LNG

Elaborating on the project, GSPC sources said that the company has already initiated the process of inducting the key personnel for implementing the project. Dialogues are on with Shell, British Petroleum, British Gas, Petronet LNG for sourcing the LNG.

“The process for sourcing LNG has just begun. We are looking forward to have a mix of long-term and spot supplies. We are also appointing advisors for helping us in this regard,” the source said, adding that the terminal capacity could be pegged at 5-7.5 million tonnes, depending on the available modules of storage tanks to be set up at the port.

Besides storage tanks, the project also includes setting up the re-gassification facility at the Mundra port and SEZ.

GSPL to gain

Apart from enhancing gas supplies in Gujarat, the project is expected bring rich dividends to GSPC group’s existing interests in gas transmission and power sector. While GSPL, with a State-wide 2,200 km pipeline network, will transport the re-gassified LNG to the consuming centres, the group will have more control over the cost and availability of feedstock for its power plants now using spot LNG.

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