 "IOC to buy 50% stake in Adani backed Mundra LNG terminal for Rs 750 crore")
The board of India's largest oil firm gave "in-principle approval for acquiring up to 50 per cent equity in GSPL LNG Ltd, which is setting up a 5 million tons per annum LNG terminal at Mundra Port in Gujarat," the company said in a statement.
GSPL LNG Ltd is a joint venture of Gujarat State Petroleum Corp and Adani Enterprises Ltd. GSPL LNG Ltd will hold the remaining 50 per cent stake in the LNG terminal that is nearing completion.
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Adani and GSPC are equal partners in GSPL LNG Ltd.
While the company did not give the acquisition cost, an official said roughly 30 per cent of the Rs 5,040 crore project cost is equity and IOC would pay for half of it.
A final number would be arrived at after valuation exercise is completed, he added.
IOC said the LNG terminal would be commissioned in the fourth quarter of 2017-18 fiscal year. It will have receipt, storage and re-gasification facilities for liquefied natural gas (LNG) and will be connected to Gujarat State Petronet Ltd's (GSPL) existing pipelines network at Anjaar (Gujarat).
As the second largest natural gas player in the country, IOC is making significant investments in natural gas infrastructure and marketing in line with the country's changing energy mix.
"We already have investments across the gas value chain, from LNG import terminals to city gas distribution networks, the major among them being a 5 million tons LNG import terminal at Kamarajar port near Chennai, scheduled for commissioning in 2018-19," IOC Chairman Sanjiv Singh said.
Mundra would be the second LNG project of Adani where IOC is investing.
IOC has taken 39 per cent stake in the proposed 5 million tons a year LNG import terminal at Dhamra in Odisha. Adani Group has 50 per cent in the project and the remaining 11 per cent is with state-owned gas utility GAIL India Ltd.
When GSPL LNG put up on offer stake in the Mundra LNG project 3-4 years back, eight firms including GAIL had expressed interest in buying the stake but only three were shortlisted.
Besides IOC, India Gas Solutions Pvt Ltd, the equal joint venture between the Mukesh Ambani-led Reliance Industries and Europe's second largest oil firm BP, and state-owned Oil and Natural Gas (ONGC) were shortlisted.
Mundra terminal, which is to be financed in a debt to equity ratio of 70:30, is expandable up to 10 million tons per annum in near future.