Saturday, October 1, 2022

Two yrs on, Indian Oil, GAIL still considering Adani LNG terminal investment

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New Delhi: India’s biggest refiner Indian Oil Corp Ltd and gas transporter Gas Authority of India Ltd (GAIL) are still considering investing in a Rs 6,000-crore liquefied natural gas (LNG) terminal being built by a unit of Adani Enterprises Ltd in Odisha, two and a half years after the plan was first announced. With five million tonnes of natural gas regasification capacity, the Dhamra LNG terminal is expected to be commissioned this year. The Adani Group had agreed to sell 49 percent of its equity stake in the LNG terminal to the two state-run companies, as per a preliminary pact signed in September 2016. Having gone ahead with their plans on regasification capacity, Indian Oil and GAIL have still not made a final decision on their equity investments.

Due-diligence studies causing delay?

“GAIL and Indian Oil Corp are jointly carrying out techno-commercial and legal due-diligence studies,” GAIL said in a response to a query on the status of planned investments in the LNG terminal. State-run refiner Indian Oil also said it was carrying out due diligence in the matter. An Adani Group spokesperson said that orders placed for the construction of the LNG terminal are on track. The Adani Group has joined with French energy giant Total to invest in the LNG terminal. “The companies will jointly develop various regasification LNG terminals, including Dhamra LNG, on the East coast of India,” the two companies said in a statement in October 2018. The Adani Group didn’t offer an update on Total’s investment plans for Dhamra LNG terminal.

The 2016 pact

IOC and gas transporter GAIL were to hold 39 percent and 11 percent equity stakes, respectively, in the LNG terminal, as per the 2016 pact. The Adani Group was to hold the remaining 50 percent. Presently, India is the world’s third-biggest consumer of oil.

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