Petronet IPO opens

Petronet LNG Ltd (PLL) and National Thermal Power Corporation (NTPC) are in advanced negotiations for the supply of natural gas for the NTPC's existing and proposed power stations at Kawas and Gandhar. If the agreement materialises, PPL may have to expand its existing facility at Dhaej.

P Dasgupta, director, finance Petronet LNG Ltd, disclosed that discussions with NTPC wereclose to finalisatioon and NTPC woul soon take a decision. The doubling PLL's Dahej facility to 10 million tonnes per annum, Dasgupta said, would cost the company around Rs 750 crore, that is 30 per cent of the actual cost.

He said a third tank would be required to upgrade the Dahej plant's capacity to 10 mtpa, which would be funded through a combination of equity and debt.

The total cost of the project was estimated at Rs 3,200 crore. However, it was completed at a cost of Rs 2,500 crore and commerical operations will begin in April, he said. The first cargo of 1,38,000 cubic meters of LNG carried by the tanker, Disha, had arrived at Dahej in Gujarat on January 30, followed by the second on the first of this month.

The first cargo was for the plant's cooling the system and some parts of the second cargo would be utilised for maintaining the infil required in pipelines while the remaining would be released through the Gas Authority of Iindia Ltd Hajira-Bijapur-Jagdishpur pipelines, Dasgupta said. ONGC's proposal to set up a facility at Dahej for extracting higher hydrocarbon fractions, would improve the company's future prospects.

He also disclosed the price review clause with Qatar-based Rasgas, after the first years of LNG being supplied at USD 20 per barrel, a price band with floor price of USD 16 and cap of USD 24.

He said the company's second LNG tanker, Rahi, would be delivered in September 2004. The company's vessels are operated by aconsortium led by Japan-based Mitsui O S K Lines, PLL has a clause enabling it to take over the operations in the event of failure by the consortium tomanage them, he said.

PLL managing director S Mathur said natural gas constituted only eight per cent of India' energy basket compared to 23 per cent in the world. On the IPO, he said the company has opted for a 100 per cent book building route and the issue would be open from March 1 to March 9. The proceeds would be used for capacity expansion and the regasification terminal. The offer would constitute nearly 35 per cent of the fully-diluted post issue paid up capital of the company.

Post issue, PLL's paid up capital would be Rs 750 crore of which the four main promoters, ONGC, BPCL, GAIL and IOC would hold 50 per cent. Gaz de France and ADB would hold 10 per cent and 5.2 per cent respectively. PLL's shares would be listed on the Mumbai Stock Exchange and the National Stock Exchange

Source:, Mumbai, March 1, 2004
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