Home » Indian Oil, GAIL sign MoU for equity stake in Dhamra LNG terminal

Indian Oil, GAIL sign MoU for equity stake in Dhamra LNG terminal

Indian Oil, GAIL sign MoU for equity stake in Dhamra LNG terminal

Indian Oil Corporation Limited and GAIL (India) Limited have signed an MoU with Dhamra LNG Terminal Private Limited (DLTPL) for taking equity in the 5 MMTPA capacity LNG receiving, storage and re-gasification terminal being set up at Dhamra Port, Odisha. The agreement was signed in New Delhi in the presence of Minister of State for Petroleum and Natural Gas Dharmendra Pradhan.

As per the MoU, DLTPL will be an equal joint venture of Indian Oil and GAIL on one hand and the Adani Group on the other. Indian Oil and GAIL would acquire 39 per cent and 11 per cent equity respectively in DLTPL, with the balance 50 per cent being held by the Adani Group. Going forward, Indian Oil and Adani Group will each divest 1 per cent of their respective stakes to a credible financial institution which will then have 2 per cent stake in the terminal. Apart from equity, Indian Oil and GAIL intend to book re-gasification capacity of 3.0 and 1.5 MMTPA respectively in the terminal.

The development comes in the backdrop of the governmentÂ’s focus on undertaking welfare and growth measures in eastern India so as to bring this hitherto underdeveloped region into the economic mainstream of the country. Prime Minister Narendra Modi has maintained that India cannot develop till the eastern part of India progresses.

Presently, states in eastern India — Odisha, Bihar, Jharkhand and West Bengal — are not able to get the benefits of natural gas, as the region does not have gas infrastructure by way of LNG terminals and a cross-country gas pipeline grid. The LNG Terminal at Dhamra would provide the potential customers in these states a clean and economically viable alternative which will also help in reducing the carbon footprint. This will also provide momentum to the economic growth of this region by attracting new industrial projects.

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