Qatar eyes 10% stake in Petronet

NEW DELHI: Qatar is set to take up to a 10% stake in Petronet LNG, the first LNG company in India through a $100m foreign currency convertible bond. Qatar Investment Authority has recently written to Petronet to begin due diligence of the company.

Petronet LNG, had earlier taken a board decision to float a $100m FCCB issue. Since discussions with Qatar for a possible equity stake in the company were already on, this route is likely to be discussed for the collaboration.

“A senior team of merchant ba-nkers will be in Delhi soon to begin the due diligence process. The final stake will depend on the valuation as the scrips would be given at a premium,” a se-nior company official said.

Petronet LNG will issue the bonds and the bond holder will have the option to convert it into equity within the first five years from the date of issue.

Qatar Investment Agency which will decide as to which oil company will finally pick up the stake is looking at various investment opportunities including NTPC’s Kayam Kulam power project and ONGC’s Mangalore LNG plans to increase its presence in the country. Rasgas is expected to be a key contender as it is the LNG supplier for Petronet’s Dahej plant. Others in the fray included Qatar Gas, Qatar Petroleum among others.

Petronet LNG has taken up a Rs 4,000 crore capex plan to expand the capacities at the Dahej plant to 12.5 million tonne and develop another 2.5 million tonne capacity at Kochi. Of the total capex, almost Rs 1,200 crore would come in as equity under a 70:30 debt equity ration.

A senior official indicated that while most of it would be generated from internal resources, there would be a gap of about Rs 450 crore. While companies like Rasgas are looking upon this as an opportunity to get a foothold in the Indian LNG market where they are expected to play a key role, Petronet LNG hopes to get supply assurance through such a tie up.