Engie to sell 10% of Petronet LNG
Friday, Mar 17, 2017
France’s Engie is planning to sell its entire 10% stake in Petronet LNG, India’s largest importer of LNG.

GDF International, an Engie unit, has written to the four Indian state companies that together own half of Petronet LNG to offer shares in proportion to their holdings, Petronet said.

Explorer Oil & Natural Gas Corp. (ONGC), refiners Bharat Petroleum and Indian Oil Corp. (IOC), and gas distributor GAIL (India) form the founding group, each with a 12.5% stake.

In a separate filing, Engie said that it considered its stake “mainly a financial participation” and retained a “strong belief in PLL’s [Petronet’s] long-term growth potential.” Engie invested in Petronet in 2001.

In a statement to LNG World Shipping, Engie pledged to continue to work with Petronet on LNG projects “of mutual interest”, including LNG bunker-supply projects, LNG supply and small-scale ventures.

R Garg, finance director of Petronet LNG, said it was mandatory for GDF to offer its holding to other founders as per the shareholders’ agreement.
“If the other founders don’t buy, GDF can sell it to anyone it wishes,” he added.

AK Srinivasan, director of finance at ONGC, said the founders might not snap up the stake.

“It is not necessary for us to buy,” he said. “The structure has to be maintained, otherwise government approval is required.”

“I’m not sure they can sell a 10% stake easily in the market,” said Sabri Hazarika, a Mumbai-based analyst at Phillipcapital India.

“Some other strategic investors can come in, like companies from Qatar or the UAE.”

Petronet handles around 80% of India’s LNG imports and is the world’s fourth largest importer of LNG.

India is in the midst of a ramp-up in LNG imports to take advantage of an oversupply of the super-cooled fuel and more than two years of downward pressure on prices.

In October, Indian Oil Minister Dharmendra Pradhan said that India was aiming to more than double its annual LNG import capacity to 50 million tonnes in the next few years.

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