HPCL abandons LNG import plans for gas marketing
State-owned Hindustan Petroleum has shelved ambitions to get a slice of the LNG import business.
“We have put on hold our LNG plans,†a HPCL source tells this report. “Availability (of LNG) is an issue.
Unless we can be sure of getting supplies there’s no point of getting into the business.†Instead, HPCL is focusing its energies on securing a slice of the emerging gas marketing business across India.
“As of now we don’t have much of a presence in gas marketing,†says HPCL. “But we are keen to expand our presence.
†HPCL has already made inroads into the gas marketing business in Gujarat, Rajasthan, Madhya Pradesh and Andhra Pradesh. In Gujarat, for instance, it is awaiting a due diligence report on GSPC’s gas retail subsidiary GSPC Gas.
“We asked Ernst & Young to do the valuation of GSPC Gas,†says HPCL. “Their report came in last week and is being examined internally.
†A proposal will then be moved to the HPCL board and, after approval, a formal proposal will be made to GSPC Gas. HPCL would like to have equal stakes with GSPC in GSPC Gas, which has identified 17 Gujarat cities and towns in which to set up a CGD and gas marketing business.
But even after a formal offer is made for GSPC Gas, HPCL is not sure it will be accepted. “GSPC is talking to (state-owned) BPCL and IOC also,†we are told.
“BPCL is very active.†Eventually, “GSPC may float a tender and invite bids.
Nothing is clear. They (GSPC) are being very elusive.
†Things are clearer in Rajasthan, where HPCL and GAIL will each have 22.5% in a CGD network in Kota. Rajasthan authorities will take 5% equity.
“Our (HPCL) board has cleared this proposal,†we learn. “We are waiting for approval from the GAIL board.
†GAIL, it turns out, will place the Kota joint venture proposal before its board sometime this month. In Andhra Pradesh, HPCL (22.5%) and GAIL (22.5%) are partners in Bhagyanagar Gas.
“GAIL has allocated 100,000 cm/d gas for Andhra Pradesh,†says HPCL. “This year Bhagyanagar Gas will set up five CNG stations in Vijaywada.
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