Petronet LNG may sell stake to RasGas

MUMBAI: Petronet LNG (PLL) is willing to offer up to 30% stake to Ras Laffan (RasGas) of Qatar, says a latest report by Citibank titled ‘Oil and Gas Sector in India-Status and Outlook’ released on Tuesday. The Indian government has offered Qatar a stake of up to 12.5% in Petronet LNG. Qatar could buy a stake in the company by subscribing to a $100-million foreign currency convertible bond issue, to be floated soon, the report said.

When asked, PLL managing director Prosad Dasgupta told ET, “They (RasGas) have done the due diligence but have not come back to us as yet. It would be an additional equity infusion into the company but the $100 million FCCB will not translate into a 30% stake.”

PLL is promoted by PSU companies — Oil and Natural Gas Corporation , Indian Oil Corporation, GAIL India and Bharat Petroleum Corporation — each holding equal stakes of 12.5%, aggregating to 50%. If RasGas buys 30%, the stake of the promoter companies is likely to come down substantially.

The promoter companies have locked in shares that translate into 5% of the equity of the company each. The remaining 7.5% may be diluted to rope in a strategic investor. French gas company Gaz de France holds 10% in the company, while an additional 5% is being held by the Asian Development Bank.

Last week, an Indian newspaper reported that Spanish power group Union Fenosa is likely to take an 8-10% stake in Petronet LNG by subscribing to the latter’s FCCB issue. However, this was denied by the company. “Fenosa is not in any negotiations with Petronet, though we have shared commercial operations with this company,” a company spokeswoman said.

According to the Citibank report, the factors in favour of the Petronet-RasGas agreement is that Petronet has an agreement with RasGas to maintain stable prices for the gas supplied by it for the first five years of the project. Accordingly, RasGas will supply LNG at a price linked to $20 per barrel of oil. This will help Petronet to maintain stability in its gas prices for the consumers.