The Hindu Business Line : GSPC rejects HPCL’s proposal for stake in Mundra terminal

Stake Stalemate
GSPC holds 50% controlling stake in the project, while Adani group holds 25%
The joint venture may offer the residual stake to public or FIs if a third partner is not found

Pratim Ranjan Bose

Kolkata, July 27 Gujarat State Petroleum Corporation (GSPC) has rejected an informal expression of interest from HPCL for 50 per cent stake in the proposed 5-7.5-million-tonne LNG terminal at Mundra.

GSPC holds 50 per cent controlling stake in the project. Adani Group holds 25 per cent participatory interest.

The terminal is slated to be commissioned in 2012.

While a third partner is yet to be identified by the joint venture, GSPC has decided to set up the LNG terminal at Mundra on a fast track basis with its existing partner, the Adani group.

In case of non-availability of a third partner, the joint venture may offer the residual 25 per cent stake to public or financial institutions at a later date.

According to sources, following a board decision earlier this month, the state PSU launched a detailed feasibility study of the project. The report is expected to be ready by September 30.

“Once the detailed report is available we will immediately enter the implementation phase,” a GSPC official told Business Line.

LNG supplies

Negotiations are also reportedly in an advanced stage with a few parties for LNG supplies.

“We are looking forward to LNG supplies through a mixture of term (including both long and short term) contracts and spot deliveries. Negotiations are currently in an advanced stage with two to three global suppliers in this regard,” the official said.

The Gujarat Government-promoted integrated energy company previously invited Essar to pick the residual 25 per cent stake in the project. The latter had informally expressed its disinterest in entering the venture at the existing location.

This was followed by a proposal from HPCL to enter the joint venture.

While HPCL officials claim that the negotiations (with GSPC) are still on, GSPC sources could not confirm the same.

“In informal discussions, HPCL expressed an interest to participate in the joint venture.

“However, discussions did not progress in this regard as HPCL wanted 50 per cent stake, which was not possible for us to offer,” a GSPC official said.

While the stalemate regarding inclusion of the third partner continues, the State Government asked GSPC to commission the project on a fast track basis so that it coincides with the commissioning of liquefactions capacities in several parts of the world.

“A number of fresh liquefaction capacities will be implemented in and around 2012. To secure LNG supplies, we have to complete the project within the scheduled time frame.

“Accordingly we have decided to go ahead with the project without waiting for the third partner,” the official said.

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