Wanted! equity partner for Ennore LNG terminal

Vol 18, PW 7 (20 Nov 14) Midstream & Downstream
     

If more proof were needed IndianOil is serious about its LNG import plans this is it: India’s biggest state-owned refiner tells us it’s looking for a 50% partner for its 5m t/y LNG terminal at Ennore.

"We’ve begun the process of setting up a JV and of finding a partner," confirms a Board director. “IndianOil is determined to see this project through, we want to commission the terminal by end-2018.

" IOC, he adds, has been approaching potential partners since Board approval of the Rs5150cr ($858m) project on October 17 and is talking to “six or seven companies”. When the JV is incorporated, IDFC and ICICI will initially hold 50% and IOC will hold the remaining 50%.

After IOC finds a partner, IDFC and ICICI will convert their stakes to debentures for debt financing. IOC is haunted by Petronet-LNG’s stranded Kochi terminal and determined not to end up in the same mess.

Gas demand in and around Tamil Nadu will be 6m t/y, it believes. In March (2014) IndianOil bought a 10% stake from Petronas in the Progress Energy project in Canada, assuring it 1.2m t/y for 20 years from 2019.

In January 2015, IndianOil will sign an agreement with Mitsubishi affiliate and Singapore-based Diamond Gas Int. to source 700,000 t/y of LNG from the Cameron LNG project in Louisiana.

Short and medium-term LNG supply contracts are also planned.