Sources said that this will lead to a reshuffle in the equity holdings of the four premier public sector oil companies -- Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Gas Authority of India Limited (GAIL) -- which together hold a 50 per cent equity stake in Petronet LNG.

Subsequent to NTPC stepping in as the fifth venture partner, the equity of these oil companies, currently at 12.5 per cent each, will be diluted by 2.5 per cent.

Under the new structure, all the five public sector companies will have 10 per cent equity each in Petronet LNG for importing LNG and developing facilities for receiving and marketing it.

However, there will be no change in the remaining equity stake of 50 per cent, of which 26 per cent is held by Petronet and the remaining 24per cent will be offered to leading financial institutions and banks along with the worldwide suppliers of LNG. Petronet LNG has already shortlisted seven leading LNG suppliers and the final names will be decided soon.

NTPC and Petronet LNG officials said discussions have taken place but refused to comment on the present status.

"Negotiations are on but no firm decision has been taken so far either by Petronet LNG or NTPC on this account," they added. ICICI and IDBI have shown interest in funding the company's investment of around $1,200 million while a host of leading international banks like Sumitomo, HSBC and Bank of America have also evinced interest.

Sources said that the issue of NTPC picking up equity in Petronet LNG has been discussed with the top brass in the power ministry and a final decision will be taken at the forthcoming board meeting of NTPC, which is expected to be held by the end of the month. Following clearance of NTPC's board, the proposal will go to the cabinet committee ofeconomic affairs (CCEA) for its final approval. In addition to Petronet LNG, NTPC is also talking to few other internationally renowned players including Enron and others for sourcing the requirements of LNG for its future power projects.

Considering that the cost of LNG as a fuel is much cheaper than naphtha and other fuels and its cost is comparative with that of imported coal, it will be used by the power sector in a big way. NTPC alone has planned a series of LNG-based projects to be set up in Gujarat and other southern states.

It may be noted here that NTPC alone can consume the entire 5 million tonnes of LNG to be imported by Petronet LNG in the phase I. This, as per sources, was one of the reasons why NTPC has been offered a equity stake in this joint venture.

Picking up a equity in this venture will help NTPC to get assured supplies for its forthcoming LNG-based power projects. Petronet LNG Limited has identified Dahej, Cochin, Mangalore and Ennore as the four ports for setting up LNG receivingand regasification facilities. Gaz De France, the largest importer of LNG in Europe, is the strategic partner of Petronet LNG Limited for preparation of detailed project schedule for commissioning of LNG terminal at Dahej and Cochin in the year 2002.