Gujarat Govt to take 5% stake in Petronet's Dahej project

Following a request made by the chief minister Narendra Modi during the dedication ceremony of the country's first LNG terminal here on Monday, Union petroleum minister Ram Naik agreed in principle to make the state government an equity partner in the Petronet LNG's (PLL) Dahej terminal.

Through its department of energy and petrochemicals, the state government will file a formal application with the ministry and the board of PLL on Tuesday, seeking its entry as an equity partner in the Dahej project.

"Following the request made by Modi, who was instrumental in completion of this project, and in consultation with those concerned, we have decided to offer a five per cent stake in the PLL's project at Dahej to the state government. PLL will seek permission from the Securities and Exchange Board of India (Sebi) after the state government files an application with PLL as the initial public offer (IPO) of the company is on the cards. And accordingly, we will try to make the state an equity partner before the IPO opens," said Naik.

GAIL, Oil and Natural Gas Corporation (ONGC), Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) are the major stakeholders in PLL.

Gaz De France, a European gas company, holds 10 per cent stake in PLL. Recently, the Asian Development Bank (ADB) picked up a five per cent equity stake in the company. PLL is coming out with an IPO of 35 per cent equity to broad base its equity.

The Asian Development Bank has shown confidence in the project by giving an in-principle approval for extending a financial package of $75 million.

"As the minister has decided to offer five per cent equity to the state government, once Sebi clears it, one of the enterprises of the state government will pick up the stakes in PLL," Modi said.

Though Narendra Modi did not divulge the name of the state government enterprise that would pick up the stake for the government, sources said the Gujarat State Petroleum Corporation Ltd (GSPCL) will be finally awarded the stake.

This is because GSPCL has a proven record in this field and is one of the major profit-making enterprises of the state government.

"We are going to work out the modalities of giving equity to the government or any company it nominates. We will seek permission from the Sebi.

"We hope that the modalities will be worked out before the IPO opens," said Suresh Mathur, chief executive and managing director of PLL.

The IPO is expected to hit the market on February 23.

Subir Raha, chairman and managing director of the ONGC, Prosanto Banerjee, chairman and managing director of GAIL, M S Ramachandran, chairman and managing director of the Indian Oil Corporation were also present.

Speaking on the occasion, minister of finance of the State of Qatar Yousef H Kamal, said "PLL's supply to Dahej terminal will be predominantly supplied from RasGas' brand-new LNG Train-3. RasGas continuously sets standards in safety, reliability and plant maintenance.

"We will strive to ensure that these high standards benefit our Indian friends as the contract with PLL has been signed for 25 years."

Sumitra Mahajan, minister of state for petroleum, and Yousef Al Sai, ambassador of Qatar in India, were also present.