Gail shortlists 4 overseas consultants for studying Dabhol buy-out prospects

New Delhi, January 20: | Updated: Jan 21 2002, 05:30am hrs
At a time when a number of leading domestic and foreign multinational energy companies are in the race for buying Enron Corp’s equity in the $ 3 billion Dabhol Power project, Gas Authority of India Ltd (Gail) seems to have gone a step ahead and is moving fast over the appointment of various consultants for studying the buy-out prospects of this beleaguered project.

After appointing KPMG as its financial consultant on matters of taxation and Amarchand Mangaldas as its legal consultants, Gail has shortlisted four international companies— Foster and Wheeler, Parson, Stone and Webster and Tractabel — for appointment of a technical consultant.

Alongside, after also having announced its plans to bid for Enron’s equity in the 5.5 million tones LNG import and re-gassification facility at Dabhol, Gail has initiated talks with Petronas of Malaysia and National Iranian Oil Company (NIOC) for sourcing LNG.

Gail chairman and managing director Proshanto Banerjee confirmed the move and said, “As we have decided to bid for both the LNG terminal and power project at Dabhol, Gail is looking at LNG from various sources including Petronas and NIOC.”

It is significant to point out here that the Enron-promoted Dabhol Power Company (DPC) had drawn up plans to increase the capacity of its LNG terminal project at Dabhol, and was in talks with Petronas of Malaysia for procuring this incremental 2-2.5 million tones of LNG.

However after Enron announced its exit from the project, the negotiations with Petronas also fell apart. “As India is planning to get gas from Iran, Gail is in talks with Malaysian company- Petronas, which is also putting up a LNG project in Iran for sourcing LNG for Dabhol power project,” added Mr Banerjee.

He added Gail was in talks with Tata Power, Reliance-controlled BSES, National Thermal Power Corporation and GEPC for a strategic partnership to bid for the offshore equity in the 2184 mw power project as also the LNG terminal project of the bankrupt energy trader Enron Corporation. Although Tata Power and BSES have shown inclination for joining hands with Gail, NTPC has ruled out bidding for DPC, he said.

Mr Banerjee said Gail has put in an initial expression of interest (EoI) for acquiring the 85 per cent offshore equity (65 per cent of Enron and 10 per cent each of Bechtel and General Electric), but so far has not heard from DPC. “We are still to sign a confidentiality agreement with DPC to begin the due diligence of the assets. While these things may take a little time, we are doing the spade work and are putting the consultants and advisors in place to guide us on various related with buying equity in this project,” he said.

Asked about the nature of strategic partnership Gail was looking at with Tata Power and BSES, Mr Banerjee said, “We could share equity on the basis of valuation of assets to be taken over by each partner or a Special Purpose Vehicle could be formed to take over DPC.”