Fenosa eyes 10% Petronet stake

NEW DELHI: Spanish power group Union Fenosa may pick up 10% equity in Petronet LNG Ltd (PLL). The deal may come through the foreign currency convertible bond (FCCB) route. PLL was planning to float a $100-million FCCB issue.

Petronet sources said a Union Fenosa team visited its  Dahej LNG import terminal in Gujarat a few months back. The team may come for due diligence again, they added.

However, with regard to FCCB route, PLL may have to take a fresh government approval for the issue since the previous approval has expired.

Union Fenosa is present in 12 countries with significant interests in the gas business.

PLL is a joint venture company promoted by Bharat Petroleum Corporation, GAIL India, Indian Oil Corporation and Oil & Natural Gas Corporation.  These firms hold 50% in the venture (12.5% each), floated to build and operate the country’s first LNG terminal at Dahej.

With an authorised equity of Rs 1,200 crore, the company’s other shareholders include Gaz de France (10%) and Asian Development Bank (5.2%). The remaining 34.8% equity is held by the public.

RasGas, the Qatari gas company, from which PLL sources its LNG was also to pick an equity in PLL as part of the original deal in exchange for PLL or one of its promoters picking stake in one of the RasGas’s LNG train. But this deal is yet to materialise.

Petronet had recently expressed its inability in entering into contracts for liquefied natural gas for the Dabhol power project. The company instead wanted the Ratnagiri Gas and Power Private Ltd (RGPPL) to directly enter into the gas deals. RGPPL, a joint venture between NTPC Ltd and GAIL India, has been entrusted with the task of running the Dabhol power plant, which uses natural gas in its second phase. PLL did not have any role in RGPPL or in the running of the terminal.

The company recently announced a maiden dividend of 12.5% for 2006-07.