Global majors, including Flour Daniel and the Japanese construction giant Mitsubishi Heavy Industries, are in race for bagging the EPC contract for the venture. The company will shortlist the bidders and finalise the deal soon.

Top sources in Petronet LNG told The Financial Express that the Kerala Government had communicated its decision to pick up 11 per cent equity stake in the venture a couple of days ago. The state has to shell out Rs 50 crore to pick up the stake. This is the major investment by the state in any single venture in recent times.

Earlier, the state wasplanning to take only a nominal equity stake in the venture. However, Petronet LNG urged the state government to hike its stake to at least 20 per cent. The state power ministry was toying with the idea of upping its stake up to 26 per cent in the venture.

NTPC, which has put up a 350 mw thermal plant in Kayamkulam is also in the race for picking up stake in the venture. Other bidders include Siasin Energy Ltd, the promoters of the 1200 mw Vypin Power Project Ltd. Rasgas-Mobil of Qatar, the LNG supplier for the venture, is understood to have bid for 26 per cent stake in the venture. Rasgas-Mobil, a joint venture promoted by Ras Laffan LNG of Qatar and US multinational Mobil LNG, had bid together for the supply LNG to the tune of 10.5 mmtpa and was picked out of seven bidders shortlisted from a global tender.

The detailed feasibility report jointly prepared by four consultants, Flour Daniel India Ltd, Mitsubishi Heavy Industries Ltd of Japan, Project and Development India Ltd and Federik Harris of the US,had estimated the total project cost at Rs 1,500 crore. Of the Rs 480-crore equity part, the promoters will hold 51 per cent stake.

The Indian Market Research Bureau, which explored the market potential of the venture, had identified local independent power producers (IPPs) as potential customers. The company got a leg up even at the drawing board stage with the 1200 mw Vypin Power Project signing an MoU for the supply of 200 million cubic meters of gas per day. Talks are on with other IPPs, including the 2,000 mw NTPC's Super Thermal Power Plant coming up in Kayamkulam and the 160 mw BSES Kerala Power Ltd, for the supply of gas. The public sector Fertilisers and Chemicals Travancore Ltd is also likely to lift gas from the Kochi terminal.

The Rs 1,200-crore Petronet LNG Consortium, floated to develop import, storage and distribution facilities for LNG in the country, is promoted by four public sector oil majors Gas Authority of India Ltd (GAIL), Oil and Natural Gas Commission (ONGC), Indian OilCorporation (IOC) and Bharat Petroleum (BPCL). The company is setting up three LNG terminals, one each in Kochi, Dahej and Ennore.