NTPC put on hold its participation in Petronet-LNG

New Delhi, Oct 22: NTPC had agreed to pick up 10 per cent equity at par with Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), Oil an...

New Delhi, Oct 22: NTPC had agreed to pick up 10 per cent equity at par with Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), Oil and Natural Gas Corporation (ONGC) and Gas Authority of India (GAIL) in the JV, being promoted to import 7.5 million of liquefied natural gas annually.

Incidentally, the decision to postpone equity participation came at a time when Quatar’s Oil Minister Abdullah Bin Hameed Al Attiyah visited India to resolve all pending issues before the JV for commencement of supply of LNG by 2003.

Petronet Managing Director Suresh Mathur told PTI that he was not aware of the NTPC’s decision and was hopeful of shareholders’ agreement by month end.

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Asked what would happen if NTPC withdrew, he said "I am hopeful that they will join us. In case of any eventuality other promoters will cover the equity… there is very clear understanding among them."

When contacted NTPC officials said the corporation could not commit investment in the proposed venture till it was able to get its power purchase agreements (PPAs) for the four proposed gas projects signed with concerned state governments.

NTPC chief C P Jain declined to comment saying "we have raised some issues… first we have to get our PPAs in place."

Mathur said NTPC had not informed him about the issue and "I am hopeful that shareholders’ agreement will be signed by the month-end or early November."

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Asked if there was a deadline set for signing of shareholders’ agreement by October 13, Mathur said that no deadline was set although it was desired to accomplish at the earliest possible date.

Petronet LNG proposed to set up two import terminals at Dahej in Gujarat (five million tonnes) at an investment of $650 million and at Kochi in Kerala (2.5 million tonnes) at $ 360 million.

NTPC, which had earlier sought 26 per cent equity in the venture, recently wrote to Petronet LNG listing out a few conditions including rotation of chairman’s post among promoters and most favoured customer treatment.

Both Jain and Mathur said that there were few issues and discussions were on for amicably settling them. They, however, did not detail the issues that were holding up finalisation of the agreement on which hinges financial closure of the venture.

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In the absence of favourable response from states on PPA for power from four gas-based power projects of NTPC at Anta, Auriya, Kawas and Gandhar, the Corporation is believed to have put on hold the projects, involving an investment of Rs 10,400 crore.

At the corporation’s annual press conference last month, Jain had said that power from these projects would cost at about Rs five a unit as against NTPC’s average of Rs 1.40 per unit.