The Hindu Business Line : IOC set to rope in Petronet for Ennore LNG project

New Delhi, Aug. 28 Indian Oil Corporation Ltd (IOC) is set to bring in Petronet LNG Ltd (PLL) as partner for its proposed liquefied natural gas (LNG) import and re-gasification terminal at Ennore, Tamil Nadu. The company’s board which met on Monday gave its nod to the proposal.

Sources told Business Line that armed with the board’s approval the company will now work out details of a memorandum of understanding (MoU).

Based on the MoU framework, IOC and PLL will sketch out the details of a joint venture. IOC wanted PLL on board for the project mainly to draw from Petronet’s experience in sourcing LNG.

Meanwhile, IOC has also been pursuing various suppliers for long-term LNG supply, which is a major deciding factor for success of such projects.

The project is estimated to cost about Rs 3,500 crore. The proposed capacity of the terminal is 2.5 million tonne per annum (mtpa), which subsequently would be raised to 5 mtpa. Sources said the project would be a 50:50 venture between IOC and PLL.

The Ennore project is jointly promoted by IOC and its subsidiary Chennai Petroleum Corporation Ltd (CPCL).

Petronet, according to sources, was also looking for expanding the role of the venture to certain downstream activities in the related areas. At present, the country has two LNG terminals — PLL’s 6.5 mtpa terminal at Dahej, Gujarat, and Shell’s 2.5 mtpa Hazira terminal. Another 5 mtpa terminal is coming up at Dabhol. Petronet is also constructing an LNG terminal in Kochi.

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