While ONGC roped in Mittal Group to use its 'influence' in African and Central Asian countries to acquire oil and gas fields, the state-run firm is tapping Hindujas to leverage their business relations in oil and gas rich Middle East region, industry sources said.
A formal agreement to float a 51:49 joint venture, similar to the ONGC Mittal Energy Ltd (OMEL) formed last year, is likely to be signed this month.
The ONGC-Hinduja venture has initially identified seven countries - Iran, Qatar, Kuwait, Libya, Oman, Saudi Arabia and UAE - for acquiring stake in oil and gas fields and firming up LNG supplies. Though OMEL had identified Kazakhstan, Turkmenistan, Azerbaijan, Uzbekistan, Congo, Angola, Trinidad and Tobago, Romania and Indonesia as priority areas for doing business, the joint venture has landed with two blocks in Nigeria.
Sources said ONGC had last year signed an MoU with Ashok Leyland Project Services, a Hinduja Group company, to float a 50:50 joint venture to invest in LNG terminals with associated power, petrochemicals, gas pipeline grid projects and related opportunities in southern India.
The MoU called for the Hindujas to play a lead role in importing up to 10 million tonnes per annum of LNG and jointly set up power plants with a capacity of between 1,000-1,800 MW.
However, the MoU could not be implemented due to objections from government directors on ONGC board. After much debate and consideration, a fresh MoU has been approved, which would be signed later this month, sources said.
They said ONGC was keen to leverage the clout of Hindujas in Gulf region, particularly in Iran and Qatar for sourcing LNG for its proposed Rs 25,000 crore (Rs 250 billion) Mangalore integrated project that includes an LNG import terminal, C2/C3 extraction plant, a 1,445 MW power plant and a basic petrochemical complex including a dual feed cracker and associated units.
India has already inked a $22-billion deal with Iran to import 7.5 million tonnes per annum of LNG from 2010. But Tehran is not honouring its commitment and ONGC feels Hindujas, who enjoy a considerable clout in Iran, can help, sources said.
Previously, Hindujas had signed an MoU with Indian Oil Corp for the latter's proposed LNG terminal at Ennore but the project could not take-off.
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