ONGC plans to ship the fuel in its liquid form (LNG) to a proposed LNG terminal at Mangalore. ONGC Videsh, the overseas arm of the state explorer, and Oil India (OIL) are together negotiating for the stake for which Videocon is reportedly seeking at least USD 3 billion, according to sources privy to the development said.
OVL-OIL combine, however, find Videocon's asking price too high and are in the processing of doing a due diligence. Sources said ONGC is taking OIL along for acquisition of Videocon's 10 percent stake in Offshore Area 1 in Rovuma basin field and feels OIL alone will not be able to buy the stake.
Bharat Petroleum Corp (BPCL) also holds 10 per cent stake in the block, which may hold as much as 70 Trillion cubic feet of gas reserves.
Global energy giants like Royal Dutch Shell, BP Plc, ExxonMobil, Spain's Repsol and China's Sinopec also have found Videocon's asking price too high.
The gas found in Offshore Area 1 is to be turned into liquefied natural gas (LNG) and shipped to markets like India. The plant in the Cabo Delgado province in northern Mozambique, is scheduled to start operating in 2018 with a capacity of 20 million tonnes of LNG per year.
The capacity will be split evenly between operators of Offshore Area-1 and Italian giant Eni, which is developing gas found in the neighbouring Offshore Area 4.
ONGC is looking at importing LNG from Mozambique at the proposed import facility at Mangalore in Karnataka.
"We will be signing a MoU with BPCL for looking into the feasibility of setting up the LNG terminal at Mangalore," ONGC Chairman and Managing Director Sudhir Vasudeva told reporters.
At 09:36 hours IST, shares rose 7.57 percent to Rs 206.80 amid high volumes on Bombay Stock Exchange. It also hit a high of Rs 226.95 in early trade.
(With inputs from PTI)
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