Indian Oil and Gail to buy stake in Adani LNG terminal

State-owned oil refiner and distributor Indian Oil Corp Ltd and gas utility Gail (India) Ltd will join as partners in a liquefied natural gas (LNG) terminal being built by the Adani Group in Odisha.

IOC will take a 38-per cent stake in the LNG terminal and Gail will pick an 11-per cent stake in Adani Group's Rs5,000-crore Dhamra LNG project in Odisha.

Adani Petroleum Terminal Pvt Ltd will hold 49 per cent equity in the LNG regassification terminal. The 5-million tonne a year liquefied natural gas (LNG) import terminal at Dhamra is expected to be completed by 2018-19.

IOC and Gail India will sign an agreement with Adani Enterprises Ltd tomorrow, which will be building the five million tonne LNG regasification terminal, Indian Oil said in a statement today.

Gail and IOC were initially looking at a 50-per cent stake in the project, but decided to leave control to Adani.

Gail had in March last year dropped plans to set up a floating LNG import terminal at Paradip. IOC too had in 2012 signed an MoU with Dhamra LNG Port Corp Ltd (DPCL) to develop an LNG terminal at the port.

Later, in May last yer, the firms signed a pact with Dhamra LNG Terminal Pvt, a firm owned by Adani Enterprises forsetting up the terminal.

Dhamra will be the sixth LNG project on the east coast. While GAIL has dropped plans of a 4-mt project at Paradip, Petronet LNG, a firm in which Gail and IOC are promoters, has shelved plans to set up a 5-mt a year LNG import facility at Gangavaram in Andhra Pradesh.

Gail, along with GdF and Shell, has proposed a 3.5-mt floating LNG terminal at Kakinada while IOC is building a 5-mt facility at Ennore in Tamil Nadu.