Indian oil PSUs to take stake in LNG plant

Indian public sector companies would be taking stake in a gas liquefication unit in Mozambique

Oil India (OIL), ONGC Videsh (OVL) and Bharat Petro Resources (BRPL) are expected to take a 30 per cent stake in the project. Indian companies would also take part in the next round of bidding for oil and gas blocks there, expected to open year-end.

Petroleum Minister M Veerappa Moily said a draft agreement for participation in the liquefication project had been sent to our embassy in Mozambique. “We need to expedite the signing (between the India and Mozambique governments). I might be going there by the first week of next month,” he said. The signed is likely next month and would include a clause on training.

Mozambique’s energy minister, Esperança Bias, added deals for the project would fructify soon and the first liquefied natural gas train (the liquefaction and purification facility) be operational by 2019.

OIL and OVL recently took a 20 per cent stake in the gas block in question, with a 10 per cent stake already held by BPRL. The Indian consortium has become the second-largest shareholder after Anadarko Petroleum, operator of the block. The Indian companies’ 30 per cent stake has cost around $60 billion (Rs 3.7 lakh crore). “We will have 30 per cent stake in the LNG terminal, too,” said OVL managing director D K Saraf.

India has conveyed to Mozambique a gas demand of up to eight LNG trains. The annual capacity would amount to 42 million tonnes and supply to India depend on the purchase agreement. The pricing aspects were discussed by the ministers. Besides Saraf, Sudhir Vasudeva, chairman of ONGC and OVL, and senior executives of BPRL were present.

“We are just starting now and our people need training from Indian companies, which have been there for a long time,” said Bias. Vasudeva said ONGC’s institutes were fully geared to do this; at least 100 would be trained in a year.

Meanwhile, a final investment decision on Mozambique’s Rovuma Basin would happen by June.