"The deadline for this payment was May 31 and to date, there has been no money coming in from the group," industry sources said. While Petronet and Essar officials were unavailable for comment on the issue, the news going around in financial circles is that players like Larsen & Toubro as well as some prominent banks and financial institutions would be `glad' to pick up Essar Oil's stake in Petronet.

However, it is as likely that the company will be able to cough up its dues as its officials have maintained that the delay is purely a "procedural issue" and that there is no question of not paying up. Essar Oil, they add, has already subscribed partially to its 13 per cent equity in the Rs 400 crore Vadinar-Kandla pipeline beingcommissioned towards the end of this year.

Apart from Essar Oil, the other shareholders in Petronet India are Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation (with a combined equity of 50 per cent), State Bank of India, ICICI, IL&FS and Reliance Petroleum (RPL) with 10 per cent apiece. IBP, the stand-alone refining company, will pick up 2 per cent from IOC's share of 18 per cent in Petronet.

Essar Oil is presently in talks with BPCL and Oman Oil Company to rope them in as strategic partners in the refinery. Assuming that Oman Oil settles for a 26 per cent stake in the company, it would automatically have access to Essar Oil's equity both in Petronet India as well as the Vadinar-Kandla pipeline.

Each of the pipelines being commissioned under the Petronet umbrella operate under separate subsidiaries. For instance, the Vadinar-Kandla network comes under the aegis of Petronet-VK where Petronet and IOC will hold 26 per cent each of the equity while RPL and Essar Oilwill account for 13 per cent apiece. Similarly, the Mangalore-Bangalore and Cochin-Karur pipelines are being executed by Petronet-MHB and Petronet-CCK respectively.

The 113 km Vadinar-Kandla network will evacuate the products from the RPL refinery (and Essar's also when it is commissioned in 2001) to Kandla from which point they will be transported through IOC's Kandla-Bhatinda pipeline.

Essar Oil is also being considered for a 11 per cent stake in the Central India pipeline which was originally the brainchild of RPL. The ministry of petroleum and natural gas still has not finalised the equity structure for the project though two alternatives are under review. One will involve Petronet India holding 51 per cent, RPL--26 per cent, Essar Oil--11 per cent while the balance will be taken up by a financial institution.

The other is allotting 26 per cent each to Petronet, IOC and RPL with the balance taken up by Essar Oil and an financial institution. The stakes have been roughly computed based on theindividual refining capacities of Essar Oil (10.5 million tonnes) and RPL (27 million tonnes).