New Delhi: State-owned Oil and Natural Gas Corporation (ONGC) has extended pact with Hinduja Group for sourcing of liquefied natural gas from Iran and other Middle East nations by one more year.
The MoU expired on May 4 and ALPS and ONGC have mutually agreed to extend the MoU by another year, sources privy to the development said.
The pact calls for the two firms to form a company which would source LNG from Iran, Qatar, Kuwait, Libya, Oman, Saudi Arabia and UAE.
ONGC is to hold 49.98 per cent stake in the venture with ALPS, which will get 48.02 per cent. The remaining two per cent would be held by banks and financial institutions.
Sources said ONGC is keen to leverage the clout of Hindujas in Gulf region, particularly in Iran and Qatar, to source LNG for its proposed Rs 25,000 crore Mangalore integrated project that includes an LNG import terminal, a 1,445 MW power plant and a basic petrochemical complex.
However, an agreement for a similar venture with Gulf Oil Corp for pursuing exploration projects in West Asia never materialised over differences on shareholding pattern.
Sources said for the JV with Gulf Oil, Hinduja group was seeking a majority stake, which was not acceptable to ONGC.
The MoU between ONGC and ALPS was first executed on November 7, 2006 with subsequent extensions during 2007-11.
The MoU provided for Hinduja Group joining the LNG import terminal planned by ONGC at Mangalore besides petrochemical plants in case sourcing of LNG through networking of ALPS materialised.
Sources said the ONGC-ALPS had made some headway in negotiating for a 4 million tons a year Iran LNG Project but the progress has been stalled due to uncertainties on project completion in view of stringent sanctions imposed on Iran by US and UN.