Singapore-headquartered Atlantic, Gulf, and Pacific Company (AG&P), is in talks with Darshan Hiranandani’s H-Energy, to acquire the latter’s LNG terminal in Jaigarh, Maharashtra, two people aware of the development said.
The deal will be significant for AG&P as it plans to use the terminal to source liquefied natural gas (LNG) in the country and expand its city gas distribution business.
Darshan Hiranandani declined to comment. AG&P did not respond to an email sent till press time.
“The deal is likely to close in a few weeks. AG&P has been looking for an LNG terminal in the country to import LNG for its city gas distribution operations. Jaigarh terminal is the right fit,” said an industry source aware of the development.
HE Terminals Private Limited, a group company of H-Energy Private Ltd, has set up an LNG regasification project at Jaigarh, Maharashtra through its subsidiary Western Concessions Private Limited.
It had plans to build two LNG terminals in the country at the cost of $3 billion: one in Jaigarh, Ratnagiri, Maharashtra, and the second, a floating LNG import terminal off Haldia, West Bengal.
In March 2016 it was awarded authorization for laying, building, operating, or expanding the Jaigarh-Panjim- Karwar Udupi- Mangalore natural gas pipeline spanning 635 kilometers. The total estimated cost of the pipeline project was Rs. 2.4 crore. However, until last 2021, only 10% of the pipeline was complete.
Last June oil sector regulator PNGRB (petroleum and natural gas regulatory board) encashed Rs 5 crore or 25% of H-Energy’s bank guarantee for delays in laying a pipeline from Jaigarh to Mangalore. The pipeline was to be completed by June 2019. H-Energy’s appeal against this PNGRB order is pending.
According to HE Terminal’s consolidated financial statements for the period April 2022-March 2023 filed with the Registrar of Companies, it made losses after tax of Rs 360 crore and has accumulated losses of Rs 649 crore.
“AG&P plans to complete the pipeline and connect it to the national gas grid to transport gas to its city gas distribution geographies across the country,” said another source aware of the development.
City gas distribution (CGD) refers to the transportation or distribution of natural gas to consumers in domestic, commercial, industrial, and transport sectors through a network of pipelines.
This March ET reported that global infrastructure investor I-Squared Capital-backed CGD companies in India — AG&P Pratham and Think Gas Distribution merged to create an over $1.1 billion entity. In the merged entity, I-Squared Capital holds over 60% stake while AG&P holds up to 15% and an Osaka Gas and Sumitomo-led consortium holds 25%.
“Since AG&P has the backing of Osaka Gas, it will not be difficult for the entity to tie up for LNG and bring in cargoes to the terminal,” said one of the sources.
Together AG&P and Think Gas Distribution hold 19 CGD licenses. While AG&P Pratham holds 12 licenses to exclusively develop CGD infrastructure in 37 districts across five states — Tamil Nadu, Kerala, Andhra Pradesh, Karnataka, and Rajasthan, Think Gas Distribution holds seven licenses to operate in 13 districts in India across the states of Punjab, Madhya Pradesh, Bihar, Uttar Pradesh and Himachal Pradesh.
India is the fourth biggest buyer of LNG. To reduce emissions and its fuel import bill, the country wants to increase the share of natural gas in the energy mix to 15% by 2030 from 6% now and the CGD network will play a key role in this.
By 2030, India plans to have 17,500 compressed natural gas stations and 120 million piped natural gas connections.
