Lok Sabha Question No. 2627 (UNSTARRED), answered on 2023-03-16
Subject: MoU between IOCL and APSEZ
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Mahua Moitra

LOK SABHA UNSTARRED QUESTION NO. 2627 TO BE ANSWERED ON 16 th  March, 2023

MoU between IOCL and APSEZ

2627: SHRIMATI MAHUA MOITRA:

## पेोिलयम और ाकृितक गैस मंी

Will the Minister of Petroleum and Natural Gas be pleased to state:

(a)  the  details  of  Indian  Oil  Corporation  Ltd.  (IOCL)  Memorandum  of  Understanding (MoU)  signed  with  Adani  Ports  and  Special  Economic  Zone  Limited  (APSEZ)  at Gangavaram Port including duration of contract, take or pay commitments along with price and volume per annum and cost escalations in the contract;

(b) whether this MoU has been approved by the Board of IOCL and if so, the details thereof;

(c)  whether  there  is  any  Government  nominee  on  the  Board  of  IOCL  and  if  so,  the details thereof;

(d)  whether  there  is  any  transaction  and  if  so,  the  Government's  approval  has  been taken for such transaction;

(e)  whether  it  is  true  that  IOCL  would  move  its  business  from  Vizag  Port  to Gangavaram Port and if so, the reasons therefor along with the charges paid to Vizag Port;

(f)  whether  there  are  any  payment  related commitments at Vizag Port and if so, the details thereof; and

(g) the details of the annual payments and quantities imported by IOCL to Vizag Ports towards utilisation of LPG facilities at Vizag Port during the last ten years?

ANSWER

## पेोिलयम और ाकृितक गैस मंालय म राय मंी ( ी रामेर तेली )

## MINISTER OF STATE FOR PETROLEUM AND NATURAL GAS (SHRI RAMESWAR TELI)

(a) Indian Oil Corporation Ltd. (IOCL) has not signed any definitive/binding agreement/MoU with either Gangavaram Port Limited (GPL), Adani Gangavaram Port Pvt.  Ltd.  which  holds  GPL  Assets  or  with  Adani  Ports  and  Special  Economic  Zone Limited (APSEZ). IOCL and GPL - an associate company of APSEZ have signed a nonbinding Term-Sheet for import of LPG by IOCL through GPL in July 2022. The price, volume  and  other  details  in  the  non-binding  term  sheet  inter  alia  include  Terminal

Handling charge ranging from Rs.1000/MT to Rs.1050/MT with escalation every three years based on agreed formula, minimum guaranteed throughput of 300 TMTPA, etc. The non binding Term-Sheet envisages a contract period of five years from the date of commissioning. (b) As  per  the  extant  Delegation  of  Authority  within  IOCL,  the  Term-Sheet  being non-binding  was  approved  by  the  Chairman,  IOCL.  Such  non-binding  Term-Sheet does not require approval of the Board of IOCL

(c) Currently, there are two Government Nominee Directors on the IOCL Board.

(d) No transaction has been carried out by IOCL with GPL as terminal has not yet been commissioned, no definitive agreement has been signed and no import has taken place.

(e) Utilization of import terminals at same port or any other ports including those in the vicinity is dependent on various factors which inter alia include overall economics, total volume to be handled, draught availability at the port, port connectivity, traffic at the port, logistics cost, operational constraint at concerned terminal, etc. As definitive agreement  is  not  yet  signed,  no  decision  has  been  taken  with  regard  to  moving business from Vizag port to Gangavaram Port.

(f)  &  (g)  Payment  to  Vizag  port  is  done  as  per  Schedule  of  Rates  published  by Visakhapatnam  Port  Trust.  Payment  of  Vizag  Port  is  done  by  IOCL  primarily  for wharfage and port charges. Wharfage for entire cargo handled on account of IOCL is paid to Port. Port charges are paid only for IOCL Time Chartered (TC) Ships.

Total  LPG  import  volume  on  IOCL  account  at  Vizag  Port  during  last  10  years  and payment made by IOCL directly to Vizag Port for LPG import is as under:-

| Year              |   Volume of LPG handled on account of IOCL (TMT) |   IOCL import in Time Chartered (TC) ships (TMT) |   Payment to Port by IOCL (Rs. in Cr.) |
|-------------------|--------------------------------------------------|--------------------------------------------------|----------------------------------------|
| 2013-14           |                                              405 |                                               66 |                                    5.8 |
| 2014-15           |                                              506 |                                               73 |                                    7.2 |
| 2015-16           |                                              633 |                                               72 |                                    9.5 |
| 2016-17           |                                              485 |                                              133 |                                   13.5 |
| 2017-18           |                                              499 |                                               33 |                                   11.9 |
| 2018-19           |                                              551 |                                              244 |                                   17.1 |
| 2019-20           |                                              574 |                                              220 |                                   19.2 |
| 2020-21           |                                              685 |                                              217 |                                   21.3 |
| 2021-22           |                                              684 |                                              523 |                                   30.2 |
| 2022-23 (Apr-Dec) |                                              554 |                                              240 |                                   22.4 |

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