Petronet needs strategic partner at Gangavaram, says MD

India's largest gas importer, Petronet LNG is likely to offer equity stakes for its Gangavaram project. Speaking about the project, Dr AK Balyan CEO & MD of Petronet LNG told CNBC-TV18 that they have not received any formal request from RIL or BP for the project. The company is looking for a strategic partner at Gangavaram to secure LNG supplies and at present, have held discussion with HPCL for the stake, informed Balyan. He further added that the company is trying to rope in a foreign strategic partner who can supply LNG.

News of the Asian Development Bank (ADB) selling its 5.2% stake in Petronet LNG is doing the rounds and Balyan explained that ONGC, IOC or BPCL is not interested in the stake. However, GAIL's decision on the matter will be known soon and it will probably be in line with the other public sector oil companies, he feels. From, Petronet's point of view, Balyan would prefer the ADB stake to go to a strategic player who can enrich their business. 

In the first quarter of FY12 Petronet LNG reported net profit of Rs 271 crore , a rise of 10.6% quarter-on-quarter and the company's net sales grew 9.7% to Rs 6,993 crore from Rs 6375.4 crore in the corresponding quarter last fiscal. 

Below is the edited transcript of the interview on CNBC-TV18.

Q: Just wanted to touch upon some news reports this morning with regards to RIL and BP's plan which might be grounded in terms of taking a stake in one of your terminals. I just wanted some more clarity with regards to these news reports and what your clarification would be?

A: Let me clarify that Reliance has been a buying from us for a long time. Off and on they keep buying a lot of gas from us, through GAIL and through other major off takers. We are aware that Reliance has some arrangement with BP and but, we do not have any exact details of their program.

We also do not have any kind of formal request to talk to us, to negotiate or offer anything on that sort for Gangavaram. Gangavaram is our project which is structured differently from Dahej and Kochi. It is through an SPV where we have kept some provision for strategic partnership.

Actually we are looking at a strategic partner who can come in and add value to our Project Gangavaram, in an effort to bring in better priced LNG for the long-term. We might also be giving some equity to the Gangavaram Port itself. But we haven't had any formal discussion on this. I am not able to comment on this now.

Q: Are there any positive vibes at all just to complete the argument? Is there a chance? Should we expect that such a stake will be asked for and be given?

A: It's very difficult to say. Certainly as a buyer of gas and marketer in the country and with their intention to go into the marketing area, we appreciate that. They maybe coming for buying gas to us. But as far as equity is concerned, we haven't had a discussion and we are not focused on that at the moment.