New Delhi: International Finance Corp. (IFC), the investment arm of the World Bank, which provides finance to companies in developing countries, plans to invest about Rs642 crore ($150 million) in public sector company Petronet LNG Ltd (PLL) to fund the expansion of its Dahej terminal in Gujarat.
PLL is a joint venture of the Indian government. Its shareholders are the four leading public sector oil and gas companies—Bharat Petroleum Corp. Ltd, GAIL (India) Ltd, Indian Oil Corp. and Oil and Natural Gas Corp.—which together own 50% of the capital. “The process has been on for a long time and in a couple of months the deal will be finalized,” said a senior PLL executive who did not wish to be named.
The investment will be made through a multi-currency (Indian rupees and US dollars) corporate loan with a maturity of up to 13 and a half years.
“Compared to the way that the lending rates are going up in India, IFC rates are much lower. They are offering us a loan at very competitive rates and it will help our expansion plans,” the executive added.
The company plans to expand the capacity of its existing regasification terminal at Dahej (Gujarat) from five million metric tonnes per annum (MMTPA) to 10MMTPA by 2009-10. The capacity expansion involves the construction of an additional regasification line and possibly a second jetty. Petronet also plans to double the liquefied natural gas tanker calls at the Dahej terminal from the present 80 tankers a year to 160 tankers a year.
With the economy expected to grow above 9% annually, natural gas imports in the country are expected to increase from the present levels of 5MMTPA to 20MMTPA during the next Plan (2007-12) to satisfy the demands of sectors such as power, fertilizer and cement, among others.
In such a situation, the existing LNG facilities in the country will not be able to re-gasify the liquefied gas that will come from overseas.
To meet this demand, new LNG terminals are being constructed across the country. The Kochi terminal, being built by PLL, will have a capacity of 2.5MMTPA initially; this will be expanded to 5MMTPA by 2011-12.