This follows the recent decision by the Central government to dilute the stake of navaratna PSUs for finding a berth for the National Thermal Power Corporation (NTPC) in the country's first pipeline company.

The government has decided to recast the equity of Petronet LNG by providing 16 per cent stakes each to IOC, BPCL and NTPC, following pressure from the power ministry to include NTPC in the list of promoters of the project. However, the dilution in IOC's and BPLC's equity is subjected to the approval by their respective boards.

The decision of the oil PSUs to go slow on the projects will hit the work of the LNG terminals being constructed at Kochi and Dahej. The projects were progressing on a fast track so far but now will hita rider, following the decision of the oil PSUs.

Sources close to the project told The Financial Express that, following the Central government's decision to revamp the equity structure of Petronet LNG, the two oil PSUs have decided to go slow on the Kochi and Dahej projects till the oil PSUs boards take a final decision on the matter.

It is learnt that the oil PSU managements had directed their respective officials not to take any crucial decision till the board meetings were over. Petronet Kochi had floated the pre-qualification tenders for EPC contractors in December last and was supposed to award the tender a couple of months ago. However, in the changed scenario, the officials had been going slow in awarding the contract, sources said.

They added that the work on the subsidiaries were now mainly confined to preliminary civil works and no other important decisions were taken on other fronts. "The new decision by the Central government had hit the progress of the work on two subsidiaries. It may eventrip the 2002-deadline set earlier for the companies to complete the works on the project," sources said.

The Rs 1,200-crore Petronet LNG consortium, floated to develop import, storage and distribution facilities for LNG in the country, was originally promoted by four public sector hydrocarbon majors, Gas Authority of India Ltd (GAIL), Oil and Natural Gas Commission (ONGC), IOC and BPCL. However, NTPC had made its case through the Union power ministry for taking a 26 per cent stake in the venture arguing that they were branching out to LNG-based power generation.

However, the move met with stiff opposition from oil PSUs who contended that with their strong moorings in the hydrocarbon industry and the predicted phasing out of naphtha, entry into LNG business was a matter of synergy for them.

Petronet LNG is setting up three LNG terminals, one each in Kochi, Dahej and Ennore by floating three different subsidiaries. The 2.5-million tonnes per annum (TPA) Petronet Kochi terminal is estimated to cost Rs1,500 core while the Dahej terminal will have a capacity of 5 million (TPA).

The third LNG terminal is planned at Ennore for which Petronet had tied up with Tamil Nadu Industrial Development Corporation (Tidco). The Kochi and Dahej projects are slated to be commissioned in 2202.