The Qatar-based Ras Laffan Liquefied Natural Gas Company will pick up 10 per cent stake in Petronet LNG Ltd for Rs 75 crore next month.

RasGas is the preferred LNG supplier for Petronet's 5 mmtpa Dahej LNG terminal. Oil and Natural Gas Corporation, a joint venture partner in Petronet LNG Ltd, will in turn pick up a 5 per cent stake in RasGas for the same amount.

"The due-diligence has been completed. The documentation and other formalities should be completed soon. We hope to sign the deal with RasGas within a month or so," Suresh Chand Mathur, chairman and managing director of Petronet LNG Ltd, said.

The cost of the project is around Rs 2,500 crore (Rs 25 billion) and the debt-equity ratio is 70:30.

Petronet LNG is a joint venture promoted by the Gail India, ONGC, Indian Oil Corporation and Bharat Petroleum Corporation Ltd with an authorised capital of Rs 1,200 crore (Rs 12 billion) for setting up LNG terminals in the country.

The four companies have an equity participation in equal parts to the extent of 50 per cent. In addition, Gas de France also holds 10 per participation and the balance equity is supported by financial institutions, banks and private companies of Gujarat.

Petronet LNG has signed a sales-purchase agreement with RasGas for 25 years on FOB basis for the Dahej terminal and the Kochi terminal.

The company has also signed an memorandum of understanding for 28.08 mmscmd of gas with various customers ex Dahej terminal.

The company has signed heads of agreement with Gail India, IOC and BPCL for sale purchase of 5 mmmtpa of regassified LNG from the Dahej terminal.

The entire marketing of the gas will be done by a joint marketing team set up by the three companies.

According to sources, ONGC will be part of the project management team and has also decided to pick up a 5 per cent stake in RasGas on behalf of Petronet LNG. RasGas has also offered support in developing the downstream infrastructure at both locations.

Close to 60 per cent of the construction of the Dahej terminal is already complete. The fabrication of piles for the balance Jetty and of the LNG tankers is progressing as per schedule.

RasGas has said the mechanical completion of its third LNG train facility is scheduled for the end of this year.

The third LNG train has been commissioned to supply Petronet LNG with 7.5 million metric tonne of LNG over 25 years at its LNG terminal in Dahej.

The company will begin the supply from Train 3 to Petronet LNG in the first quarter of 2004. RasGas had signed engineering, procurement and construction contracts in April 2001 for construction of a third LNG train in order to meet the requirements of Petronet.

The new facilities will be rated for 4.7 mmta of LNG and with a small increment from RasGas' existing facilities will supply PLL's requirements.

RasGas was established in 1993 to produce LNG and other related hydrocarbon products from Qatar's huge offshore field, North Field.

The Dahej project of Petronet LNG is likely to achieve financial closure by the middle of 2003. The company has decided to go in for non-recourse financing for the project.