"You mentioned Mobil's participation in Petronet LNG. Mobil is not a user for LNG. There is a clash of interest between Mobil and Petronet LNG as Mobil is a member of the supplier company," managing director of GDF International Jacques Deyirmendjian said in a letter to Suresh Mathur, chairman and managing director, Petronet.

Petronet LNG, a consortium of public sector oil companies, has recently entered into a 25 year pact with Rasgas-Mobil consortium for importing 7.5 million metric tonnes of LNG annually to its proposed terminals at Dahej, Gujarat and Kochi, Kerala.

Mobil had sought a 26 per cent stake at Dahej terminal and Petronet LNG was negotiating with the multinational to accommodate it in the project, company sources said.

"The interests of the supplier and buyer aredifferent. Seller should not be taken at this step by the buyer in regasification project," Deyirmendjian said adding that after the financial closure of the Dahej terminal, the situation could be re-examined and any advantage given to the supplier had to be `symetrical'.

GDF, strategic partner to Petronet LNG, was appointed to assist the holding company in purchase of LNG, preparation of detailed feasibility report (DFR), construction, supervision and operation of the Indian terminals.

As per the memorandum of understanding (MoU) between Petronet LNG and GDF, the latter is entitled for a minimum of 26 per cent stake in the Dahej terminal.

"I do not clearly understand the reason why you plan to take, at this preliminary stage, other parties who asked for participation in LNG terminals as equity holders...," Deyirmendjian said.

Seeking an early implementation of the commercial agreements from Petronet LNG, the letter said, that Petronet LNG should soon implement its decision on GDF's participation inthe holding company and also the provisions of MoU between the two companies.

"I emphasise the need to correct the system soon, before it become difficult," the letter said. Deyirmendjian claimed that GDF was fully competent and had the in-house expertise for firming up bid documents and selection of engineering, procurement and construction (EPC) contracts to build the LNG terminals.

Set up by the government, Petronet LNG is a consortium of Indian Oil Corporation, Bharat Petroleum, Gas Authority of India and Oil and Natural Gas Corporation to create LNG import terminals in the country holding 12.5 per cent stake each. The rest is proposed to be held by the financial institutions and the public.