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ONGC extends pact with Hindujas for sourcing LNG

Pact calls for the two firms to form a co which would source LNG from Iran, Qatar, Kuwait, Libya, Oman, Saudi Arabia and UAE

Press Trust of India  |  New Delhi 

State-owned Oil and Natural Gas Corp (ONGC) has extended with Hinduja Group for sourcing of liquefied natural gas from and other Middle East nations by one more year.

had in November 2006 signed an MoU with Hinduja Group promoted Ashok Leyland Project Services Ltd (ALPS) to use the diversified group's influence in oil and gas rich nations to get a lucrative deal.

The MoU expired on May 4 and ALPS and have mutually agreed to extend the MoU by another year, sources privy to the development said.

The calls for the two firms to form a company which would source from Iran, Qatar, Kuwait, Libya, Oman, and

is to hold 49.98% stake in the venture with ALPS, which will get 48.02%. The remaining two% would be held by banks and financial institutions.

Sources said is keen to leverage the clout of Hindujas in Gulf region, particularly in and Qatar, to source for its proposed Rs 25,000 crore Mangalore integrated project that includes an import terminal, a 1,445 MW power plant and a basic petrochemical complex.

However, an agreement for a similar venture with Gulf Oil Corp for pursuing exploration projects in West Asia never materialised over differences on shareholding pattern.

Sources said for the JV with Gulf Oil, Hinduja group was seeking a majority stake, which was not acceptable to

The MoU between and ALPS was first executed on November 7, 2006 with subsequent extensions during 2007-11.

The MoU provided for Hinduja Group joining the import terminal planned by at Mangalore besides petrochemical plants in case sourcing of through networking of ALPS materialised.

Sources said the ONGC-ALPS had made some headway in negotiating for a 4 million tons a year Project but the progress has been stalled due to uncertainties on project completion in view of stringent sanctions imposed on by US and UN.

First Published: Mon, June 11 2012. 16:44 IST