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Project description

Petronet LNG Limited (PLL or the company) was established in 1998 to import liquefied natural gas (LNG),
build and operate the related terminals and regasification facilities, and sell natural gas to distribution
companies to meet India’s rapidly-growing energy needs. PLL currently has one 5 MMTPA operational LNG
terminal and regasification facility (the Terminal) at Dahej, Gujarat, India, which was commissioned in April
2004. Regasified LNG (RLNG) from the Terminal is sold to Gas Authority of India Limited (GAIL), Indian Oil
Corporation (IOC) and Bharat Petroleum Corporation Limited (BPCL) (the Offtakers), which is then sold by
the Offtakers to end-consumers (mainly comprising power producers, fertilizer manufacturers and industrial
units) in the region. The Terminal is connected to two main high pressure gas transmission networks
currently in operation, the Hazira-Bijapur-Jagdishpur (HBJ) gas pipeline owned by GAIL and the Gujarat Gas
Grid owned by Gujarat State Petronet Limited (GSPL) and connected via GAIL pipeline near PLL terminal.
The work related to direct connection of GSPL line with PLL’s facility is underway. RLNG is transported
through these networks under gas transportation agreements entered into between the Offtakers and
network owners.

- PLL plans to:

- construct an additional regasification line, with its associated LNG storage tanks and if required a second
jetty, to expand the capacity of the existing terminal at Dahej from the present 5 MMTPA to 10 MMTPA;
and 
- construct a greenfield 2.5 MMTPA LNG terminal (with provision for capacity expansion to 5 MMTPA) within
Cochin Port area, at Kochi, in Kerala, both in India. 

The project involves: 

- at Dahej, installation of additional facilities within the existing terminal premises including 2 x 160,000 m3
gross capacity LNG storage tanks; 8 shell and tube vaporizers (STVs); 
- 2 submerged combustion vaporizers (SCVs);
- 2 x 7.6 MW (ISO RATING) gas turbine generators (GTGs); and 
- possibly a 5th 160,000 m3 gross capacity LNG storage tank and a second jetty (including a second LNG
unloading system) if required, with doubling of the LNG tanker calls at the Dahej terminal from the present
80 tankers per year to 160 tankers per year; and 
- at Kochi, construction of: LNG unloading jetty; dredging of basin; 
- LNG unloading facilities including arms, pipelines and trestle for the pipeline;
- 2 x 155,000 m3 LNG storage tanks with provision for 3rd tank;
- LNG re-gasification system (2.5 mtpa capacity);
- plant utilities including 3 x 8 MW open cycle gas turbine, 6-7 MW grid electricity system, fresh water
system, domestic and process waste water treatment system, compressed air, nitrogen and fire fighting
system. 

The principal associated facility, on account of the project, is the proposed RLNG transmission line from the
LNG terminal to Coimbatore and Mangalore in Tamil Nadu and Karnataka, respectively, which will be laid,
operated and maintained by GAIL.

The company has approached IFC for a corporate loan to fund its expansion program.

Project sponsor and major shareholders of project company


PLL has been publicly listed since 2004, and its shareholders are the four leading public sector oil/gas
companies, viz. Bharat Petroleum Corporation Ltd. (BPCL), Gas Authority of India Ltd. (GAIL), Indian Oil
Corporation Ltd. (IOC) and Oil & Natural Gas Corporation Ltd. (ONGC), which together own 50% of the
capital, Gaz de France (GdF) with 10%, the Asian Development Bank (ADB) with 5.2%, and the balance
with the public.

PLL has been publicly listed since 2004, and its shareholders are the four leading public sector oil/gas
companies, viz. Bharat Petroleum Corporation Ltd. (BPCL), Gas Authority of India Ltd. (GAIL), Indian Oil
Corporation Ltd. (IOC) and Oil & Natural Gas Corporation Ltd. (ONGC), which together own 50% of the
capital, Gaz de France (GdF) with 10%, the Asian Development Bank (ADB) with 5.2%, and the balance
with the public. 

BPCL, GAIL, IOC and ONGC are all publicly-listed, Government of India majority owned, Public Sector
Undertakings (PSUs):

- BPCL is engaged in crude oil refining and the storage, distribution and marketing of petroleum products
and petrochemicals. BPCL’s total revenues during 2005-06 were $17.4 billion. The net worth of the company
at end FY06 was $1.8 billion. 
- GAIL is the largest gas transmission and marketing company in the India. Its activities include gas
marketing, transmission and distribution through pipelines, retailing of natural gas, natural gas processing
for production and marketing of LPG, liquid hydrocarbons and petrochemicals. GAIL’s total revenues during
2005-06 were $3.3 billion. The net worth of the company at end FY06 was $2.2 billion. 
- IOC is engaged in crude oil refining and the storage, distribution and marketing of petroleum products.
IOC owns and operates 10 of the country’s 18 refineries with a combined refining capacity of 54 MMTPA.
IOC’s total revenues during 2005-06 were $41.4 billion. The net worth of the company at end FY06 was
$6.9 billion. 
- ONGC is engaged mainly in exploration, development and production of crude oil, natural gas, and some
products such as NGLs, C2-C3, Naphtha and Kerosene. ONGC’s total revenues during 2005-06 were
US$18.3. The net worth of the company at end FY06 was $12.7 billion. 
- GdF - Gaz de France is one of Europe's major energy players. The group produces, transports, distributes
and sells gas, electricity and services to 13.8 million customers. With over 40 years of experience in the
LNG business, GDF operates in all links of the LNG chain, viz. liquefaction, transport and regasification; it is
Europe's second-largest player in LNG, and the world's fifth largest importer. In 2006, the Group’s
consolidated revenues were Euro 27.6 billion. The net worth of the company at end FY06 was Euro 16.7
billion.
Total project cost and amount and nature of IFC's investment
Please note that this section has been modified on May 4, 2007 to reflect IFC’s potential greater
involvement in PLL’s capital structure, as a result of ongoing discussions with the company.

The total cost of the project is estimated at $900 million. IFC will invest up to $200 million equivalent, for its
own account, and is also considering an up-to $150 million B-Loan.
Location of project and description of site
- Dahej Terminal:

The site is in the Gulf of Khambhat, Bharuch District, in the state of Gujarat on the west coast of India. The
site is about 45 kilometers (km) from Bharuch, the nearest major town. The terminal area is at 21° 41’
latitude and 72° 32’ longitude. The (existing) site is part of a larger industrial complex, with three
operational jetties, and a fourth under construction, to serve nearby industries, and is not environmentally
sensitive. The site, that occupies approximately 50 hectares (ha), is north of the confluence of the Narmada
River with the Gulf of Khambat. It already has the infrastructure necessary for heavy industries (including
transportation), and the project will use many existing facilities. A few small villages surround the site:
Ambheta, Dahej, Jageshwar, Lakhigam, and Lurare.

- Kochi Terminal:

The project site is located at Cochin Port situated on south-west coast of India, about 930 km south of
Mumbai and 320 km north of Kanyakumari. Cochin Port, located on Willingdon Island (latitude 9O 58’ north
and longitude 76O 14’ east), The Kochi port is one of the major natural harbors on the west coast of India is
an all weather port. The port already has 16 berths including 3 oil jetties and is spread over a vast area
(1940 acres). The approach channel, 200 meter wide and about 9 kms. long, will be dredged to 17 meter
depth (below chart datum). The inner channel, 400 meter wide and 11.9 meter deep, is designed to
accommodate 87,500 tonne DWT vessels at the Kochi oil terminal in Ernakulam channel.

The LNG Terminal will be constructed on Puthuvypeen Island, located on left entrance of Cochin port, Fort
Cochin being on the right. Vypeen is a peninsula on the northern side of the entrance channel to Cochin
Port. During the recent past, there has been significant accretion on the northern side of the entrance
channel and west of Vypeen resulting in a wide area of virgin land of about 250 hectares being available.
This area has been named as Puthuvypeen. This area is vacant and for the most part away from habitation.
Accordingly Cochin port has earmarked this area for development of supplemental port terminal, proposed
to be developed as a Special Economic Zone. The proposed LNG terminal is located in this area, on 32.4 ha
of accreted land.