IOC to rope in partner for LNG project
New Delhi   07-Sep-2010

IndianOil plans to rope in a strategic investor for the liquefied natural gas terminal that it proposes to put up north of Chennai.

A detailed feasibility report on the project will be ready by November or December, after which the company will take the proposal to its board, IOC's Chairman, Mr B.M. Bansal, told presspersons here today on the sidelines of the annual general meeting of Chennai Petroleum Corporation, an IOC company.

He said funding the project would not be a problem for the company, but it would require technology, which it hoped the strategic investor would provide.

The Rs 10,000-crore LNG terminal would include a 1,000 MW power plant and the project would be implemented jointly with the Tamil Nadu Industrial Development Corporation, a State Government enterprise. (In the late 1990s, TIDCO had invited bids and awarded the contract to set up a 2.5 million tonnes a year LNG terminal and a 1,800 MW power plant to a consortium led by the Aditya Birla Group that included Siemens, CMS Energy of the US, Unocal of the US and Woodside Petroleum of Australia. This project did not take off.)

IOC expects to commission the LNG terminal by 2014-15.

Follow on offer

IOC will dilute around 10 per cent of its equity through a follow-on public offer, the proceeds from which will be used to part-finance its Rs 50,000 crore capital expenditure programme over the next five years, according to Mr Bansal.

The capex includes taking a 26 per cent stake in the Rs 10,000 crore nuclear power project, which is planned along with Nuclear Power Corporation of India Ltd in Kota, Rajasthan.

Out of the total capex, Mr Bansal said Rs 25,000 crore will be to expand refining capacities and the balance on petrochemical and pipeline projects and marketing initiatives.

On under recovery loss, Mr Bansal said it could be around Rs 35,000 crore for IOC this fiscal. “We would not like to change the price frequently. In the last two-and-a-half months motor spirit price was deregulated. We have not increased or reduced the price. International crude price could be $70-80 a barrel for the next six months,” he said.

On the BSE, IndianOil shares gained 0.09 per cent to end at Rs 425.10 on Monday.