Oil ministry, promoters ONGC, IOC, BPCL and Gail India debate Petronet stake buy

MUMBAI: State-run energy firms and oil ministry officials are in a quandary over equity holding of Petronet LNG and have called a meeting to decide whether state companies should buy the 5.2% holding being sold by Asian Development Bank - a transaction that would bring the company under government control, a top executive said.

Oil ministry officials including Petroleum Secretary GC Chaturvedi and Petronet LNG's promoters - ONGC, IOC, BPCL and Gail India - plan to debate this issue at a brainstorming session in Lonavla. The state-run firms hold 50% stake in Petronet LNG. Apart from ADB, which is selling the stake, GDF Suez holds 10% and the balance is held by the public.

Petronet LNG was promoted by state-run firms but it was decided to cap their equity stake at 50% so that the company, which pioneered imports of liquefied natural gas into India, can operate with the freedom a private firm enjoys.

"We as promoters of Petronet LNG are facing a big dilemma now after the ADB offered to sellits 5.2% stake in the company as all of us including Gail, ONGC and IOC have the right of first refusal and we would be keen to pick up stake but that would mean Petronet LNG will become a PSU," an official with one of the equity holders said.

Petronet's freedom allowed it to negotiate spot LNG prices in the international market, the official said.