InvestorQ : Is it true that HPCL is buying out the stake of Shapoorji Pallonji Group in its LNG JV?
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Is it true that HPCL is buying out the stake of Shapoorji Pallonji Group in its LNG JV?

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Mary Joseph answered.
3 months ago
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HPCL will buy out the share of its JV partner SP Ports in the 5 MTPA LNG re-gasification terminal under construction at Chhara in Gujarat. SP Ports is owned by the Shapoorji Pallonji Group and it included one of the group’s investments in the energy infrastructure space. It is currently a 50:50 joint venture between HPCL and SP Ports. The total investment envisaged is Rs.5411 crore. Now that balance 50% of SP will go to HPCL.

This transaction has become essential in the light of the cash crunch that the Shapoorji Pallonji group has been going through due to say that the Tatas brought on the Pallonji group pledging the shares of Tata Sons to raise funds. This had put the group in a real spot and it was looking to monetize some of its existing assets to bail the group out of the liquidity crunch.

The buyout transaction is expected to be completed by the end of March 2021. HPCL is India’s fourth largest LNG importer and it aggressively looking to build up its LNG portfolio. India currently consumes around 145 million standard cubic meters a day or MMSCMD of gas and with gas likely to play a bigger role in the fuel mix, this space is going to see exponential growth in the coming years.

Currently, gas comprises just about 6.2% of India’s primary energy mix as against the global median of 24%. The government has grand plans to increase this share to 15% by 2030.

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