Adani puts pressure on GSPC over Mundra LNG stake

Vol 13, PW 7 (10 Sep 09) Midstream & Downstream

Adani Energy is delaying the signing of a shareholder agreement with GSPC for the proposed Mundra LNG terminal.

GSPC, we hear, believes this is because Adani wants to double its stake in the project. PETROWATCH learns GSPC sent an agreement to formalise Adani’s equity stake in the project sometime in June, but hasn’t heard back since.

“Adani is turning a deaf ear to our reminders to formalise the equity structure,â€‌ reports a GSPC source. “It isn’t signing the contract because it wants to double its stake from 25% to 50%.

â€‌ GSPC holds a 50% stake in the 5m t/y, Rs4500cr ($1bn) LNG import terminal proposed for Mundra in the northwest Gujaratdistrict of Kutch; Adani is being offered just 25%. GSPC, it seems, is unwilling to offer the remaining 25% to Adani because it wants to bring in a strategic partner, preferably a LNG supplier, who can assure it long-term supplies.

Adani by contrast is uncomfortable with the idea that a third company could carve out a presence in Mundra, especially since all the infrastructure and land at the port is still under its ownership. According to Gandhinagar sources, Adani is also trying to pressurise GSPC through the office of chief minister Narendra Modi.

“Adani’s cosy relationship with theGujaratchief minister is well known,â€‌ we hear. GSPC managing director DJ Pandian confirms to this report that GSPC is in negotiations with Adani.

“The shareholder agreement is a very important document and typically takes time,â€‌ he said. “We are still negotiating.

â€‌ When asked if Adani was delaying the agreement to leverage a raised stake, Pandian replied: “I really don’t know. There are other details that need to be studied thoroughly.

This isn’t something you do overnight.â€‌ Asked to comment, Adani replied: “Tomorrow we could demand the moon but it is GSPC’s prerogative to decide whether we get the full moon or only a part of it!â€‌

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