Indian Oil to Buy into Gujarat LNG Terminal

Indian Oil Corporation has in-principle agreed to acquire an up-to-50% stake in Adani Group-backed Mundra LNG import terminal in India's westernmost state of Gujarat for an estimated cost of rupees 7.5bn ($120mn), Press Trust of India reported August 4 citing a company statement.

GSPL LNG, a joint venture owned 50-50% by Gujarat State Petroleum Corp and Adani Enterprises, is setting up a 5mn mt/yr LNG terminal at Mundra Port. It is expected to be completed in the 12-month period ending March 2018. After the Indian Oil deal, GSPL LNG will retain 50% in the Mundra project.

Presently, there are four operational LNG import and regasification terminals in India at Dahej, Hazira, Dhabol and Kochi. India has the capacity to import around 28mn mt/yr of LNG through the four terminals, meeting close to half of the total gas supply of the country. India's oil ministry estimates that the country's import capacity will more than double in next five years as existing terminals expand capacity and new ones come online.

Indian Oil also has a 39% stake in the proposed 5mn mt/yr LNG import terminal at Dhamra in the eastern Indian state of Odisha. Adani Group has 50% stake in that project while the remaining 11% is held by Gail. Indian Oil is also developing a 5mn mt/yr terminal in southern Indian state of Tamil Nadu. 

Shardul Sharma