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Petronet LNG promoters in dilemma over company’s stake sale

21 Nov 2011

Petronet LNG promoters and Oil Ministry are in dilemma over the stake sale of company by Asian Development Bank (ADB). For this the promoters and Oil Ministry have called a meeting to decide whether state companies should buy the 5.2% holding being sold by ADB. The 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.

State-run firms - ONGC, IOC, BPCL and Gail India together holds 50% stake in Petronet LNG, GDF Suez hold 10%, besides 5.2% held by ADB which is selling the stake and the balance is held by public.

While promoting Petronet LNG, which pioneered imports of liquefied natural gas into India, state-run firms decided to cap their equity stake at 50% so that the former can be operated with the freedom which a private firm enjoys. Petronet's freedom allowed it to negotiate spot LNG prices in the international market. The state-run firms have the right of first refusal are eager to pick up stake in the company which implies that Petronet LNG would become a PSU.

Petronet LNG is one of the leading players in oil and natural gas industry space. It has India’s first and largest LNG supply terminal located at Dahej. 

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