The government has ordered a probe into Petronet LNG's imports of liquefied natural gas following allegations that the company has quietly switched to buying lean gas, which can only be used as fuel, instead of rich gas that can also produce petrochemicals and cooking gas, government and industry officials said.

The long-term deal to import LNG was negotiated 13 years ago and Petronet opted for rich gas keeping in mind feedstock requirement of proposed petrochemical plants, including $4-billion ONGC Petro additions Ltd (OPaL) project and Gail India, two persons with direct knowledge of the matter said.

The oil ministry is concerned about the matter as it controls both ONGC and Gail, which are also among the promoters of Petronet, which is technically a private company as state-run firms own 50% of its equity, just below the threshold for government control and scrutiny by the Comptroller and Auditor General ( CAG) and the Central Vigilance Commission ( CVC).

But the petroleum secretary is the chairman of the company, giving the government a handle to investigate its affairs. Gail, ONGC, BPCL and IOC hold 12.5% each in the firm. European LNG importer GDF Suez holds 10% stake in the firm, another 5.2% is held by the Asian Development Bank and the public holds the rest.

"After the issue was raised by some MPs (Members of the Parliament) an enquiry was ordered," said a senior government official who did not wish to be identified. Petronet LNG (PLL), which is sourcing 7.5 million tonne per annum liquefied natural gas (LNG) from RasGas, had first negotiated the deal in 1998-99.

Lok Sabha MP from Nagpur, Vilas Muttemwar, confirmed raising the matter in Parliament in December asking "whether attention of the government has drawn to the alleged 2.5 lakh crore liquefied natural gas scam?" He did not give details. "I raised the issue in national interest and the government assured that the matter was under examination," Muttemwar, who was also the former minister of state for new and renewable energy in the previous UPA government, told ET on phone from Nagpur.

PLL, RasGas and the oil ministry did not respond to ET's queries.

One executive, who had served in the PLL board, said, "LNG deals are high value deals as an irregularity of even one cent in LNG price would hurt company for about 18 lakh in just one cargo."

Source: economictimes.indiatimes.com