Special Correspondent

IOC to decide on investment on the project after feasibility study

NEW DELHI: NTPC and EPC firm Larsen and Toubro are among the companies that have shown keen interest in partnering Indian Oil Corporation (IOC) in its $750-million LNG import terminal at Ennore near Chennai, newly appointed IOC Chairman B. M. Bansal said here on Wednesday.

“Many companies have evinced interest in the project. NTPC, L&T, Tamil Nadu Electricity Board (TNEB) are among those,'' Mr. Bansal told reporters.

However, IOC has not yet decided if it will build the 2.5-million tonne a year liquefied natural gas (LNG) import terminal on the outskirts of Chennai.

“The investment decision will depend on the detailed feasibility report (DFR) which we have commissioned,'' he said. The report is expected by the end of this year. IOC had in 2007 put on hold the LNG import-cum-re-gasification terminal after huge gas finds off the East Coast made the project economically unviable.

Similarly, Mr. Bansal said IOC was looking at equity partners in companies like Saudi Aramco and Kuwait Petroleum for its Rs.29,777-crore Paradip refinery project in Orissa.

“We are thinking to offer equity to someone who can bring synergy to the project,'' he added.

IOC is looking at companies which can supply crude oil to the 15-million tonne a year refinery that is scheduled to be completed by March 2012. Companies like Saudi Aramco, the world's largest crude oil producer, and Kuwait Petroleum Corp may fit into the scheme as oil supplier to the project.

“So far discussions have not taken place with anyone but we will like to begin them soon. Strategically, we wanted to offer equity at a premium, but if financial problems persist we will have to advance it,'' he added. IOC wants someone who can commit long-term crude supply as equity partner.

IOC had last year signed a loan agreement with a consortium of lenders led by State Bank of India for term loan worth Rs.14,900 crore for the project.

Mr. Bansal said IOC was targeting commissioning of the refinery in the first quarter of 2012.