While the Indian Oil Corporation (IOC) has decided to invest between 26 and 50 per cent in the equity of these joint venture companies after assertaining the requirement of the funds independently, IOC chairman MA Pathan told the newsmen here on Tuesday.

To promote joint ventures the entire LNG project has been divided into shipping, terminals and regasification, pipeline network, marketing and distribution and power project.

Pathan said that the corporation has drawn up extensive plan to enter LNG sector in a big way. While KIOLC will set up LNG terminal in the East coast, IOC has tied up with Enron to market from Dabhol terminal, he said.

Recently, KIOLC, a consortium led by IOC, Petronas of Malaysia and Cocanada Port Company, has obtained Letter of Support (LoS) from Andhra Pradesh.

As per the LoS, the state government has fixed a target of 180 days for submitting detailed feasibility report. The project will be implemented in three phases and financial closure will announced in a year, said IOC director Subir Raha.

Under the first phase of the project, the first being taken up on the East coast, a liquefied natural gas (LNG) berth, storage and regassification facilities and pipeline network would be put in place at a cost of Rs 5,150 crore, the IOC chief said.

The second phase of the project would entail an investment of Rs 6,300 crore while in the subsequent phase a mega power project costing Rs 4,000 crore and inland storage and distribution of dimethyl ether (DME) involving an investment of Rs 300 crore would be taken up, Pathan said.

The consortium has already appointed Crisil to undertake market research and evaluate the demand for LNG and other products within AP and adjoining states, Raha explained.

While the project has been targeted for completion within 42 months of finalisation of detailed project report and statutory approvals, a new floating storage technology option could help advance the commissioning by an year, the IOC Chairman said.

The technology, still in a nascent stage, would, however, push up the project cost as it involves stationing of dedicated tankers at the site.The Petronas representative Muri Mohammed, also present at the press conference, said his company was interested in picking up equity share in the venture.

Petronas, a leading natural gas and oil company with business interests in 19 countries, was also in talks with global power giant Enron, the promoter of Dhabhol power project in Maharashtra, for supply of liquefied natural gas, he said.

Earlier on July 24, a meeting of the state cabinet, chaired by chief minister N Chandrababu Naidu, had decided to award LoS to IOC-led consortium based on the recommendations of a task force constituted to examine the bids.

The consortium, selected from among the five bidders, had offered to start commercial operations and delivery of lng to consumers within 42 months of obtaining statutory clearances from the government.

Of the five sets of consortia which had approached the government to execute the project, the IOC and shell-led consortium were asked to make their presentations before the task force.

At present, there is no LNG terminal in the entire East coast of India and Kakinada port offers an ideal location for such a project, the state officials say.

The Port had already been developed with 12 metre depth navigation facility and was centrally located on the 1,000-km long coastline of the state.