Adani Exports Ltd (AEL), the flagship company of Rs 4,200 crore Adani group, inked a "heads of agreement" (HOA) with the Indian Oil Corporation (IOC), a consortium member of Petronet LNG Ltd (PIL), for the supply of the re-gassified liquefied natural gas (LNG).
The HOA was signed on December 31, 2001 in New Delhi.
According to the company, the salient features of HOA include a contract period of 20 years with a take-or-pay liability of the 80 per cent of the annual contracted volume with a mark-up period of three contract years immediately following the take-or-pay year.
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It was added that AEL has set up a separate company called Gujarat Adani Energy Ltd (GAEL) to carry out its natural gas distribution business through the underground pipelines to domestic, commercial and industrial consumers in the select geographical region -- from Vadodara in the Central Gujarat -- to Mehsana in the North Gujarat.
The IOC will supply the re-gassified LNG from the PLL's LNG terminal, currently under construction, at Dahej. As per the project schedule of PLL, it will receive the first LNG cargo carrier at Dahej terminal in the fourth quarter of the year 2004, it mentioned.
It was further added that out of the total gas volume required for its gas distribution project, GAEL has signed the HOA with IOC for the committed supply volume of 1.3 MMSCMD of LNG which will increase, subject to the sales built-up of GAEL and the availability of natural gas with IOC from PLL, in the phased manner to 2.5 MMSCMD by the year 2007-8.
GAEL anticipates that the HOA with IOC shall get converted into the gas sales agreement by March 31, 2002.