Hiranandani Energy, which once had ambitions to build multi-billion dollar integrated energy infrastructure projects such as two LNG terminals and a pipeline for end-to-end natural gas solutions, is in talks with Singapore-based Atlantic, Gulf and Pacific Company (AG&P) to sell a majority stake in the company and its units for a few hundred crores of rupees, two industry sources aware of the development told ET.
AG&P is close to picking up a 70% stake in H-Energy and one of its subsidiaries, while Darshan Hiranandani will hold on to the remaining 30%. “AG&P plans to buy 70% in H-Energy and one of its subsidiaries as it is looking to expand its LNG and CNG operations in India,” said the first source cited.
AG&P and H-Energy did not respond to an email sent on April 11. Darshan Hiranandani did not respond to calls and a WhatsApp text message sent last week.
Sources added that the transaction value is worth only a fraction of the initial investment envisaged, as H-Energy could develop only two assets – the 56-km R-LNG pipeline from Jaigarh port to Dabhol, linked to the national gas grid, and a jetty at Jaigarh Port in Ratnagiri district of Maharashtra, to berth a floating storage and regasification unit (FRSU) for R-LNG unloading.
H-Energy had plans to build two LNG terminals at the cost of USD 3 billion – one in Jaigarh, Ratnagiri, Maharashtra and the second, a floating LNG import terminal off Haldia, West Bengal. But plans did not take off as envisaged due to financial and on-ground challenges.
“There is only a jetty and a pipeline, which would have cost the company a few hundred crores. So the transaction value would be commensurate with that,” said the second person aware of developments. According to the Registrar of Companies’ filings, as of March 31, 2022, H-Energy had a net worth of INR 295 crore and free reserves of INR 56 crore.
H-Energy Pvt Ltd (HEPL) was formerly known as Salus Developers Pvt Ltd. It primarily engaged in the business of investing in shares, debentures and other securities of the companies. In December 2010, the company changed its name to H-Energy.
Last May, HEPL’s Jaigarh plans were further delayed when Oslo-based Hoegh LNG announced that it was terminating FSRU Hoegh Giant’s 10-year contract, citing “the charterer’s default of the contractual terms.” The contract was signed in December 2020.
In March 2016, HEPL was awarded authorisation for laying the Jaigarh-Panjim-Karwar Udupi-Mangalore natural gas pipeline spanning 635 km.
Last June, the oil sector regulator, the Petroleum and Natural Gas Regulatory Board (PNGRB), encashed INR 5 crore, or 25%, of H-Energy’s bank guarantee for delays in laying a pipeline from Jaigarh to Mangalore. The pipeline was to be completed by June 2019. H-Energy’s appeal against this PNGRB order is pending.
AG&P’s India Plans
Sources said AG&P has been scouting for LNG terminals on both the east and west coasts of India to expand operations by 2024-25. Its proposed 1-million tonne per annum terminal at the Karaikal Port in Puducherry is facing challenges and may take longer to complete.
