ONGC in talks with Petronet for Dahej project operation

Anupama Airy and Jyoti Mukul

New Delhi, May 22: OIL and Natural Gas Corporation (ONGC) has begun negotiations with Petronet LNG Limited (PLL) for procuring the prestigious operation and maintenance (O&M) contract for the LNG terminal project at Dahej.

ONGC is the only promoter which, despite holding a 12.5 per cent equity in PLL, has not been assigned any significant role so far in this LNG venture.

PLL is a joint venture between Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), Gas Authority of India Ltd (Gail) and ONGC, with 12.5 per cent stake each, for import of 7.5 million tonne of LNG - 5 million tonne at the Dahej terminal and 2.5 million tonne at the Kochi terminal.

These four oil and gas majors jointly command a majority equity stake of 50 per cent in PLL.

Senior government sources told The Financial Express that whereas Gail has been given the contract for transportation of re-gassified LNG for both Dahej and Kochi terminal, the marketing of re-gassified LNG is being done jointly by Gail, IOC and BPCL from the Dahej and Kochi projects. “Whereas, Gail, BPCL and IOC have been given significant tasks of marketing and transportation of re-gassified LNG, ONGC has been asked to constitute a project management team, comprising officials from the corporation. This team has been asked to manage the EPC contract which has been awarded to Ishikawajima - Harima Heavy Industries’ (IHI) Japan-led consortium. ONGC has, therefore, asked PLL to give it the O&M contract for the Dahej LNG project,” sources said.

Senior PLL officials, on being contacted, confirmed the move and said talks were on with ONGC in this regard.
Of the balance 50 per cent equity, GDF International of France, Ras Gas of Qatar and the Gujarat government, hold 10 per cent equity each, while the balance 25 per cent stake is being held by the financial institutions.