IOC mulling over GSPC’s stake in Mundra

Indian Oil Corporation, one of the greatest oil refineries in India is likely to buy Gujarat State Petroleum Corporation’s stake in Mundra LNG import terminal in Gujarat. Mundra LNG import terminal, which is worth Rs 4500 crores, is under construction and is likely to be completed by mid FY17.

The stock of IOC has surged 3.6 per cent at Rs 540 levels and is hovering around its 52 week high. GSPC also has surged 2.4 per cent at Rs 131.

The debt laden GSPC will sell 50 per cent stake to IOC and will exit 5 million tonnes of LNG import terminal project yearly, together with storage and re-gasification facilities spread across an area of 28 hectares on the coast.

IOC would later buy 50 per cent of the remaining half from GSPC but would want to keep 25 per cent with itself. IOC thereby will be able to expand its gas business but will work hand-in-hand with GSPC for their smooth operations. Moreover, GSPC being the state government owned company can help IOC to lay pipelines for flowing gas to the consumers as the terminal itself is not connected with any pipeline so far.

Amongst others mulling for the 25 per cent stake are ONGC and India Gas Solutions which is a joint venture between Reliance and Europe’s BP. Earlier there were 8 bidders to buy the stake in the said project.