Indian Oil Corporation’s version of the deal with Adani Port Gangavaram

Indian Oil Corporation took to Twitter to clarify its involvement in an Adani Ports' gas import terminal. In a series of tweets, the state-run refiner said there was no binding agreement or take-or-pay liability in place with Adani Ports.

The clarification comes after TMC MP Mahua Moitra's tweet accusing IOC of not following a proper tender process for the agreement. Moitra’s tweet said the refiner would shift “a large chunk” of LPG imports to the Adani facility at Gangavaram port from the adjacent state owned Visakhapatnam port.

Moitra raised a stink of a scam in hiring of the port facility without a tender, contradicted Adani Ports and Special Economic Zone Ltd's earning call presentation that said ''MoU signed with IOCL for a take-or-pay contract at Gangavaram Port for building LPG handling facilities.'' ''.

Tagging Oil Minister Hardeep Singh Puri and CVC  Moitra said, ''No tender. No CVC norms. Moving business from Vizag Port to Gangavaram. Skimming from coal, skimming from gas, now skimming from 'chula' in every household. Shame!''.

She quoted newspaper report saying Indian Oil would fully underwrite Adani’s LPG terminal. A take-or-pay contract means that the state-owned firm will have to pay for using the terminal's full 5 lakh tonnes capacity a year even if it ships less than the committed quantity.

IOC currently uses state-run Visakhapatnam or Vizag Port, located adjacent to Gangavaram port, to import some 7-8 lakh tons of LPG annually.

According to IOC, the agreement with Adani Ports, Gangavarm is advantageous for it as the company has offered a price of Rs 1,050 for LPG import terminal charges, which includes the added benefit of being able to unload refrigerated LPG directly from bigger vessels.

In contrast,, the terminals at Visakhapatnam SALPG (South Asia LPG, a joint venture of TOTAL & HPCL) charges Rs 1,050 and EIPL (East India Petroleum Limited- a private company) charges Rs 900 but have a lower capacity for unloading vessels and lack a captive connectivity system for continuous use.