Petronet LNG in talks to set up Rs 3,500 cr power plant at Kochi

Petronet LNG Ltd, the nation’s largest natural gas importer, is in talks to set up a Rs 3,500-crore power plant adjacent to its upcoming LNG import facility at Kochi in Kerala.

Petronet has proposed to set up a 1,200 MW gas-fired power plant, 50:50 joint venture with the Kerala government, sources privy to the development said.

Kerala, which faces power shortages, is willing to partner Petronet and the land it will give for setting up of the power plant would be considered as part of its equity contribution in the project.

Also, the state government has shown inclination towards accepting Petronet’s condition of buying at least 75 per cent of the power generated at the power plant under a long-term power purchase agreement or PPA.

Sources said the power generated at the plant, which would use liquefied natural gas (LNG) imported from Australia as fuel, would be priced at less than Rs 7 per unit, much cheaper than Rs 11 per unit the state government is currently buying power from some private generators.

Three units of 350 MW each would be set up in 48 months but operationally it will generate 1,200 MW of electricity.

MoU for the project is likely to be signed between Petronet and the state government shortly, they said, adding a detailed feasibility report would be prepared subsequently.

For Petronet, the power plant would be a blessing in disguise as it would consume most of the high-priced LNG it has contracted from Gorgon project in Australia.

The firm had in 2009 signed a pact to buy 1.5 million tonnes of LNG at a price equivalent to 14.5 per cent of prevailing international oil price.

At $100 per barrel oil price, the LNG will cost $14.5 per million British thermal unit at the time of loading in ships on the Australian ports.

After adding $1.25-1.5 per mmBtu in shipping or transportation cost and 5 per cent import/customs duty, the landed price of gas will be $16.5 per mmBtu.

The prices of the fuel to consumer after adding local transportation, taxes and other charges will cost about $19-20 per mmBtu or more than three times the delivered price domestic gas.

Sources said the 5 million tonne a year Kochi terminal, which was originally scheduled for mechanical completion in second quarter of 2012-13 fiscal, is now being targeted for finishing by the year end to synchronise it with building of pipelines that will take the gas to consumers.

GAIL India Ltd is running behind schedule in laying of pipelines that will connect Kochi import terminal to major power and fertiliser consumers.

BUY MORE AND MORE PETRONET SHARES AT 140-130 RANGE FOR 2-3 YEARS INVESTMENTS

Yamuna Expressway is ready, says Jaypee Infra

The 165-km Yamuna Expressway is ready for commercial operation, the company that built the road, Jaypee Infratech, has said.

The road, built at a cost of Rs 12,839 crore, runs along the Yamuna river, connecting the industrial town of Noida and Agra. The tolled road is expected to reduce traffic congestion on the National Highway 2.

According to the terms of the concession agreement, Jaypee Infratech is entitled to collect tolls at rates fixed by the Uttar Pradesh Government for 36 years. In addition, the company will receive 6,175 acres of land across five different sites at the Government’s cost of acquisition, paying only an annual lease rent of Rs 41 per acre.

A research report of Angel Research, issued today, has said it has assumed a toll of Rs 1.5 per km. The report has noted that the commencement of the Yamuna Expressway (YE) is a trigger for the stock.

However, the report observes that the Yamuna Expressway faces competition from the existing highway NH-2, which is currently toll-free. While plans are afoot to make it a six-lane road, after which it will be tolled, the reluctance of commuters to use the Yamuna Expressway could impair its profitability.

Currently JPinfratech is trading at Rs.56..I advice my clients to go long on stock with a 2 year perspective for a target of 160-180

Wonderla looks at PE route for expansion

Wonderla Holidays, an amusement park, plans to raise up to Rs 200 crore either through private equity or through an initial public offering.

Arun K. Chittilappilly, managing director of Wonderla, said the funds will be used to set up new amusement parks in Hyderabad and Chennai. Wonderla is part of the listed Rs 1,000-crore V-Guard company.

The Hyderabad project is expected to begin first and the Chennai project will start shortly thereafter once some land issues are resolved, said Chittilappilly. The company already operates amusement parks in Kochi and Bangalore.

He said that Wonderla is almost debt-free, so there should not be a problem attracting investors.

“In 2003, we had a debt of Rs 50 crore, but now, apart from a debt of Rs 15 crore on the resort, we don’t have any debts,” he said.

Regarding the possibility of an IPO, Chittilappilly said it was also one of the options before the company.

The company is not looking to expand beyond South India in the immediate future, he said. “First we want to expand in the South. We will look at North India later on, but not for the next five years.”

SO BUY VGUARD INDUSTRIES AT 380 LEVEL FOR LONG TERM PRESPECTIVE FOR A TGT OF 480-500 RANGE

SOME ACTIONS MAY SEE IN RETAIL STOCKS

Some buying interest may seen in Pantaloon,Shoppersstop,Trent and Provogue as prez polls have been over and govt may start negotiation on fdi in multi brand retail...Traders can buy these stocks

StanChart PE shells out Rs 130 cr for stake in Karaikal Port

Standard Chartered Private Equity (Mauritius) II Ltd has invested Rs 130 crore for a minority stake in Karaikal Port Private Ltd.

The funds will be used in development work to enhance the port’s capacity to 28 million tonnes per annum from 21 MMTPA.

Motilal Oswal Investment Advisors acted as the transaction advisor for MARG group.

Karaikal port had already attracted private equity investments from India Infrastructure Fund, Ascent Capital Advisors and NYLIM Jacob Ballas India Fund III LLC. Standard Chartered is the fourth investor.

With a healthy business and political environment, location advantage and better infrastructure, Karaikal is poised to be the ‘most strategic and efficient’ port on the South East coast of India, said Mr G.R.K. Reddy, Chairman and Managing Director, MARG Ltd, in a press release.

Mr Rahul Raisurana, Managing Director, Standard Chartered Private Equity, will join the port’s board. There is strong demand for high quality port infrastructure to service expanding external trade and increasing needs for multiple commodities for growing economy, he said.

The port, located between Chennai and Tuticorin ports, is a deepwater, all-weather port on the South-East coast of India. Awarded on a build, operate and transfer basis by the Government of Puducherry in 2006, the port when fully developed is envisaged to have a total of nine berths capable of handling up to 45 MMTPA.

The port is to be developed over three phases with the final phase getting operational by 2017.

BASED ON THE NEW DEVELOPMENTS IN KARAIKAL PORT I LIKE TO BUY SOME  MORE SHARES OF MARG LTD AT 80 RANGE

Trafigura's 1st Asia refinery investment in India; BP out

Oil trader Trafigura has made its first move into refining in Asia, investing up to $130 million for a 24 percent stake in Nagarjuna Oil Corp Ltd's (NOCL) planned refinery in Tamil Nadu and replacing BP as NOCL's crude supplier. India and other emerging markets are boosting refining capacity to feed rising regional demand, while their counterparts in the United States and Europe restructure or shut