India has offered Qatar a 5.2 per cent stake that Asian Development Bank (ADB) held in Petronet LNG Ltd, the nation's largest liquefied natural gas importer.
Petronet, which is registered as a private company even though public sector oil firms hold 50 per cent stake and Oil Secretary is its Chairman, has approached Qatar Petroleum International (QPI) offering ADB's 5.2 per cent stake.
The PSUs -- Indian Oil, Oil & Natural Gas Corp, Bharat Petroleum and GAIL India -- had previously evinced interest in buying the ADB stake but the Oil Ministry blocked the move as it would have turned Petronet into a public sector company.
Qatar's Minister of Energy & Industry Mohammed bin Saleh Al-Sada on November 4 wrote to Oil Minister M Veerappa Moily acknowledging Petronet's approach and said, "QPI and ADB, with Petronet support have already engaged in preliminary evaluatory discussions.
"I have personally endorsed QPI to move forward as it will be a milestone for strengthening mutual cooperation between our countries," he wrote.
While IOC, ONGC and BPCL quickly retracted from their decision to buy ADB stake after the Oil Ministry diktat, GAIL has continued to stick to its guns that promoters should be allowed to buy the 5.2 per cent stake.
"In light of GAIL's stance, there could be a possibility that ADB will not be able to proceed further in selling its shares to QPI," the Qatari Minister wrote.
"I urge the Indian government and look forward to Your Excellency's assistance to help materialise this deal at the earliest in the interest of the mutual business relations between our nations," he told Moily.
The ADB had on August 23 last year offered to sell its 5.2 per cent stake in Petronet, in which GAIL, IOC, BPCL and ONGC hold 12.5 per cent stake each and the right of first refusal.
Last year, the boards of all the four promoter companies approved exercising the pre-emption right over ADB stake and proposed cash buyout of the multilateral lending agency's interest.
However, the ministry, whose Secretary is the Chairman of Petronet, vetoed the proposal at a March 26 meeting of Petronet board, sources privy to the development said.
"Keeping in view the specific approval of the Cabinet on restricting the aggregate Government/PSU participation to 50 per cent of paid up capital for providing the desired flexibility to Petronet LNG Ltd to operate in a dynamic LNG import market, the existing shareholding structure in the context of PSU participation,