GAIL in talks with InterOil Corp for stake in New plant

 State-run gas utility GAIL India on Monday said it is talking to Interoil Corp for a possible stake in the Canadian oil firm’s proposed liquefied natural gas project in Papua New Guinea.

“We are still talking to them. Nothing has been concluded as yet,” GAIL Chairman and Managing Director B. C. Tripathi told reporter.


Papua New Guinea, an island in the Southwestern Pacific ocean, last year granted initial approvals for its second LNG project, which would follow a plant proposed by an Exxon Mobil Corp-led venture.

The venture would cost about $5 billion for a plant producing 3.5 million tonnes a year of LNG, with shipments due to start in 2014.

Asked about reports that GAIL’s talks with InterOil Corp had run into trouble over pricing issues, he said, “Talks are still on... it is at a preliminary stage.”

Mr. Tripathi did not say what percentage of stake could GAIL get in the project. “I cannot say what stake GAIL can get. We are still talking to them on all these issues.”

The Canadian company is believed to have asked GAIL for a ’resource payment’ of $5.03 million apart from equity contributions as strategic investors. GAIL finds the asking price too high.