Thapar Co To Buy Out Tata Tea In Saptarishi

India's downstream petroleum giant Indian Oil Corporation (IOC) is planning to make another foray into the liquefied natural gas (LNG) sector by setting up an LNG import terminal at Kakinada in Andhra Pradesh.

The Kakinada terminal is projected to have a capacity of three million tonnes of LNG per annum and will be the first such terminal in Andhra Pradesh.

Besides the state government, which is expected to participate in the project's equity in a big way, Petronas of Malaysia, with which IOC has a memorandum of collaboration (MoC) for projects both in the upstream and downstream sectors, will also pick up a substantial stake in the project.

LNG for the project will be sourced from Malaysia, Indonesia or Australia.

IOC, which will have a 10 per cent equity in the joint sector Petronet LNG as well, has already made a number of presentations to the state government on the benefits of the project.

Official sources said the project was still at the planning stage and the financial details would be worked out once all the three partners gave their consent to the project.

IOC is confident of the financial viability of the project, since it is situated on the east coast of the country.

The corporation is of the view that the west coast is already overcrowded with Petronet LNG planning two LNG import projects (Dahej and Kochi), British Gas one (Pipavav) and Enron one (Dabhol).

In contrast, the east coast is relatively virgin with only one project of Tidco (Tamilnadu Industrial Development Corporation) at Ennore making some headway.

Even this project is learnt to be facing problems and, according to industry sources, could even be abandoned by Tidco.

The other proposal of the Orissa government to set up a five million tonnes per annum LNG terminal at Gopalpur, in association with Al Manhal International Group of UAE, is also still at the drawing board stage. TITLE>