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STRATEGIC MOVE

Qatar Petroleum eyes stake in Indian LNG firm

Doha, December 25, 2012

Qatar Petroleum, the country's energy giant, has expressed its interest to buy a 5.2 per cent stake in Petronet LNG, one of the fastest growing companies in the Indian energy sector, from Asian Development Bank (ADB), said a report.

Qatar Petroleum has majority stakes in RasGas and QatarGas that along with other liquefied natural gas (LNG) suppliers in the world compete to sell fuel to India. But this will possibly be the first instance of a LNG supplier picking up stake in an importing firm, the Indian news agency PTI reported.

If Qatar Petroleum picks up the 5.2 per cent stake as well as board position in Petronet, it will give the company an undue advantage over other suppliers as it will be privy to price and other negotiations, the PTI report cited sources in Petronet's promoter firms as saying.

The PSUs - Indian Oil, Oil & Natural Gas Corp, Bharat Petroleum and GAIL India -- had previously evinced interest in buying the ADB stake but the Indian oil ministry blocked the move as it would have turned Petronet into a public sector company.

Sources said the ADB had been keen to sell its 5.2 per cent stake in Petronet since last year.

Petronet, which is registered as a private company even though public sector oil firms hold 50 per cent stake and the Oil Secretary as its chairman, has approached QP's 100 per cent subsidiary Qatar Petroleum International offering ADB's stake, the report added.

The Indian Oil, Oil & Natural Gas Corp, Bharat Petroleum and GAIL India had previously evinced interest in buying the ADB stake but the Oil Ministry blocked the move as it would have turned Petronet into a public sector company. It was then offered to Qatar Petroleum International.

But the stake being picked up by QP will lead to a potential conflict situation, sources said.

RasGas, in which QP holds 70 per cent stake, supplies 7.5 million tonnes of LNG on a long-term contract to Petronet. It remains a potential supplier for the new terminals that Petronet is building at Kochi and east coast and a board position may give it an undue advantage, the sources stated.

Qatar's Minister of Energy & Industry Mohammed bin Saleh Al-Sada in a letter to Oil Minister M Veerappa Moily last month had acknowledged Petronet's approach and said "Qatar Petroleum International (QPI) and ADB, with Petronet support have already engaged in preliminary evaluatory discussions."

"I have personally endorsed QPI to move forward as it will be a milestone for strengthening mutual cooperation between our countries," he added.

Gaz de France International (GDFI) holds a 10 per cent in Petronet and also has the right of first refusal over ADB's stake. But the French energy giant has decided to waive this right off.-TradeArabia News Service




Tags: Qatar Petroleum | Stake | Petronet | ADB |

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