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Journalism of Courage
MUMBAI, FEB 13: Two oil PSUs may need to step down from the equity structure of Petronet LNG to accommodate the National Thermal Power Corporation (NTPC) as partner. The two will, however, be allowed to participate in the equity of Petronet’s subsidiaries — Petronet Dahej and Petronet Cochin. This is an option being considered where, eventually, three PSUs (including NTPC) will share the equity equally in the holding company.
Presently, four oil PSUs account for 50 per cent of Petronet’s equity taking up 12.5 per cent each. They are the Oil and Natural Gas Corporation, Indian Oil Corporation, Bharat Petroleum Corporation and Gas Authority of India. The balance is planned to be offered to non-government undertakings so that the PSU participation in the company is confined to 50 per cent.
Consequently, there will be no change in keeping the total PSU holding to 50 per cent. This would, obviously, mean that two oil companies will necesarily have to step down from the holding company though they will be given berths in the two subsidiary companies of Petronet LNG.
Sources have also reiterated that the three PSUs in the holding company will share the equity equally at 16.66 per cent. Hence, there will be no way the NTPC request of 26 per cent will be acceded to. It is also too early at this stage to speculate which of the two oil PSUs will retain their stake in the holding company or its subsidiaries.
"What is clear is that the interests of the oil PSUs will be protected at any cost. Thus, even if they do not participate in the equity of the holding company, they will automatically qualifyfor the subsidiary," sources said. The change is also believed to be a fallout of the mounting pressure by the ministry of power to seek a berth for NTPC, though this news could not be confirmed.
Petronet LNG was formed last year to cater to creation of infrastructure for imported LNG in the country. This was largely a result of the recommendations of the R-group, a committee set up by the ministry of petroleum and natural gas in 1995.
To quote the report: "The technology of production of LNG, its transportation and setting up of LNG terminals is a proven one, whereas technology for laying deep-sea pipelines is still to be fully established. In addition, landing of west Asian in the western region and its transportation to the southern region may make imported gas more expensive than LNG at coastal locations in southern India."
Therefore, says the report, "Import of LNG for meeting the demands of natural gas in western India may turn out to be a more practical option in the long run. There exists adistinct possibility of importing LNG at very competitive prices in the southern coast of India."
Former petroleum secretary (and present finance secretary) Vijay Kelkar, in his second Vasant Sheth memorial lecture, spoke of the crucial role Petronet LNG had to play.
