GAIL has once again set the cat among the pigeons by offering to buy the Asian Development Bank's entire 5.2% stake in Petronet LNG Ltd, a private company promoted by state-run oil companies for importing gas in ships.
It has written to petroleum secretary G C Chaturvedi, who is the company's ex-officio chairman, that the stake can be equally split among the three other state-run promoters of Petronet if they too wanted a share of the pie. GAIL, ONGC, BPCL and IOC have 12.5% stake each in Petronet . French major Gaz de France holds 10%. The shareholders agreement gives all five of them the first right of refusal in case the ADB sells its stake.
In case GAIL or the other state-run promoters pick up ADB's stake, Petronet will become a public sector company and will come under the government's various oversight agencies such as parliamentary panels besides vigilance and audit authorities.
Petronet was set up with the aim of importing LNG (liquefied natural gas). It was registered as a private company to enable it to take decisions quickly without government red tape – an essential requirement in gas trade. The petroleum secretary was nominated as ex-officio chairman to assure gas suppliers and investors of the government's guarantee towards payments.
Dust had risen over the ADB stake earlier in April 2008 when the bank sent letters to the state-run promoters asking whether they were interested in picking up its stake.
Source: Times of India