Indian Oil Corp Interested in GSPC's Stake in Mundra LNG Terminal

Indian Oil Corporation (IOC) is in talks to buy Gujarat State Petroleum Corp's (GPSC) stake in the under-construction Mundra LNG import terminal in western Indian state of Gujarat.

According to a report by Press trust of India, GSPC has offered its 50 per cent stake in the 5 mtpa terminal to IOC. However, sources have told the news agency that IOC does not want GSPC to completely exit the project. IOC believes GSPC should remain as a part of the project for smooth operations.

The terminal is not connected with any pipeline for shipping gas to consumers. To lay a pipeline to the nearest grid, it would require state government support and with GSPC on board, it could be done easily, Press Trust reported.  

Sources also said IOC is keen to take half of GSPC stake and wants the Gujarat government entity to keep the remaining 25 per cent.

GSPC LNG, a unit of GSPC holds 50 per cent interest in the project. Adani Group holds 25 per cent while the remaining 25 per cent is to be bid to a strategic partner, the shortlist of which also included IOC.

Reliance Industries and BP promoted India Gas Solutions Pvt Ltd and Oil and Natural Gas Corp (ONGC) are the other two firms shortlisted to pick up 25 per cent stake earmarked for the strategic partner in the project, according to Press Trust.

Initially, eight firms including state gas utilityGAIL India had expressed interest to buy the stake but only three were finalised.

Mundra terminal, which is to be financed in a debt to equity ratio of 70:30, is expandable up to 10 mtpa in near future.