Petronet to sew up spread plan by mid-March

The board of Petronet LNG Ltd (PLL), which has been operating country's first liquefied natural gas (LNG) terminal at Dahej in Gujarat, will finalise its ambitious expansion plan at a meeting to be convened during the middle of next month.

PLL, a consortium of oil and gas majors in the country, is planning to double its LNG capacity to 10 million metric tonne per annum (MMTPA) with an investment of Rs 787 crore.

Its current capacity of 5 MMTPA has already been picked up by its venture allies and others including Hindustan Petroleum Corporation Ltd (HPCL) and Gujarat State Petroleum Corporation Ltd (GSPCL).

The feasibility study covering the technical and marketing aspects for the proposed expansion is in an advanced stage. The final reports will be ready shortly.

"The board is expected to meet in mid-March to approve of the expansion plan and we hope to start work for erecting another LNG tank and developing other infrastructure for the expanded capacity by July this year. Once the construction work begins, the terminal will commence its operations with expanded capacity from the 30th month of the day of commencement of construction of the third tank," P Dasgupta, director (finance) of PLL told Business Standard on Sunday.

PLL, which signed the contract to buy 5 MMTPA of LNG per year for 25 years from RasGas of Qatar, will buy another 2.5 MMTPA from RasGas. Another 2.5 MMTPA may be sourced from the National Iran Oil Company with which GAIL India Ltd, one of PLL's promoters, has initiated discussions.

The initial public offer for shares worth Rs 260 crore being floated by PLL will be open from March 1 to March 9. The price band is between Rs 13 and Rs 15.

PLL will also float its bond that is partially guaranteed by the Asian Development Bank in May-June through which it is expecting to raise Rs 525 crore at 6.25 per cent.