IGL keen to buy ADB stake in Petronet LNG
PTI January 3, 2013Indraprastha Gas Ltd is keen to buy Asian Development Bank's 5.2 per cent stake in Petronet LNG Ltd, the nation's largest liquefied natural gas importer.
IGL management is considering picking up ADB's stake which has been on offer for more than a year now, industry sources said adding a formal offer may be made soon.
ADB stake going to IGL will help resolve long-standing dispute between Petronet's principal promoters and the firm's management led by its Chairman and Oil Secretary.
Petronet's promoter firm's IOC, ONGC, GAIL and BPCL were originally interested in buying ADB's 5.2 per cent stake but the firm's management was opposed to it as it would have led to PSU holding crossing 50 per cent that would turn the LNG importer into a government entity.
Sources said IGL being a private company, its buying ADB stake will not alter Petronet's character, thereby satisfying the company management and the oil ministry.
For the promoters too it will be a win-win situation as they will get a larger say in Petronet's affairs through IGL.
IGL is 50 per cent owned by gas utility GAIL India and Bharat Petroleum Corp Ltd (BPCL).
Sources said IGL buying stake would also help in averting the potential conflict situation that was arising due to Petronet management offering the ADB stake to Qatar Petroleum.
Qatar Petroleum, the Persian Gulf country's state-run energy firm, has majority stakes in RasGas and QatarGas that along with other liquefied natural gas (LNG) suppliers in the world compete to sell fuel to India.
If Qatar Petroleum (QP) picks up 5.2 per cent stake as well as board position in Petronet, it will give the company an undue advantage over other suppliers as it will be privy to price and other negotiations, sources said.
This would have possibly been the first instance of a LNG supplier picking up stake in an importing firm.
Petronet, which is registered as a private company even though public sector oil firms hold 50 per cent stake and Oil Secretary is its Chairman, has approached QP's 100 per cent subsidiary Qatar Petroleum International, offering ADB's stake.
IOC, ONGC, BPCL and GAIL had previously evinced interest in buying the ADB stake but the Oil Ministry blocked the move as it would have turned Petronet into a public sector company.
It was then offered to Qatar Petroleum International. But the stake being picked up by QP will lead to a potential conflict situation, sources said.
RasGas, in which QP holds 70 per cent stake, supplies 7.5 million tonnes of LNG on a long-term contract to Petronet. It remains a potential supplier for the new terminals that Petronet is building at Kochi and east coast and a board position may give it an undue advantage, they said.