Instead of being a holding company for subsidiaries that would set up LNGimport terminals, Petronet LNG will be the operating company for the DahejLNG import terminal, which is fast racing towards financial closure.

Industry sources confirmed that Petronet LNG would be the operator of theDahej terminal, which has already issued bid documents for an EPC(engineering project and construction) contractor.

The pre-bid conference for the Rs 800 crore EPC contract is scheduled forDecember 1. Meanwhile, Petronet LNG has signed memoranda of understanding(MOUs) with prospective customers and tied up its LNG supplies fromRasGas-Mobil.

The hotly debated equity structure of the mega venture is expected to befinalised soon and the Dahej terminal should be able to bring in fivemillion tonne of LNG from Qatar by 2002-03. The swift progress towardsfinancial closure of the Dahej terminal was probably why the corporatestructure of Petronet LNG was kept simple.

The company's corporate brochure still says that "Petronet LNG Limited willbe a Holding Company and subsidiaries are currently being formed, which willimplement the infrastructure projects at different locations."

Industry sources, however, said their understanding was that there would bejust one company at the moment.

A new equity structure has been devised for the company to end the squabbleamong would-be promoters. All the initial promoters and newcomer, theNational Thermal Power Corporation (NTPC), are being offered 10 per centstake each in Petronet LNG Limited.

The joint venture company was promoted by the Gas Authority of India Limited(GAIL), the Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation(IOC) and Bharat Petroleum Corporation Limited (BPCL) in July 1997. Thepromoters were to together hold 50 per cent equity in Petronet LNG, whilethe remaining shareholding was to be divided among financial institutions,the LNG supplier, the strategic partner Gaz de France and others.

Subsequently NTPC, which is among Petronet LNG's customers, demanded a 26per cent stake in the holding company. A Cabinet note was also preparedoffering 16.5 per cent stake in the holding company each to GAIL, ONGC andNTPC.

Indian Oil and Bharat Petroleum were offered a shareholding in subsidiariesthat would be set up to promote and operate the Dahej and Kochi LNGterminals.

The proposal did not quite succeed in smoothing the ruffled feathers withinthe oil industry. Shunting Indian Oil and Bharat Petroleum out of theholding company also somewhat diluted the strength of the combined financialmuscle of the "navratnas," that Petronet LNG enjoys.

The weight of the "navratnas'' is actually perceived as an edge the companyhas over competing ventures, not all of which will see the light of day. Theequity structure being mulled over now offers an equal shareholding to allthe initial promoters of Petronet LNG and NTPC.

The broad corporate plan drawn up in July 1997, when the joint venture ofnational oil companies was born, was to set up LNG import terminals at Dahejin Gujarat, Kochi in Kerala, Mangalore in Karnataka and Gopalpur in Orissa.The Dahej and Kochi terminalas will first go on stream and the LNG importventures in the east coast will follow.

The Kochi terminal, which will import 2.5 million tonne of LNG, is slated togo on stream around the time that NTPC completes the expansion of itsKayamkulum power plant. The ``pre-project'' activities for the terminal,like land acquisition and terrestrial studies, have already been completed.Industry sources feel that the Kochi terminal could be set up by asubsidiary of Petronet LNG if necessary. The project may be undertaken bythe mother company as well, they mused.