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IHB to Raise Rs 6,700 cr to Complete Kandla-Gorakhpur LPG Pipeline

IHB, a joint venture (JV) of oil marketing companies, plans to raise Rs 6,700 crore through term loans to complete 2,757 km long liquified petroleum gas (LPG) pipeline project from Kandla in Gujarat to Gorakhpur in Uttar Pradesh.

 

The project, being executed at a capital cost of Rs 10,000 crore, will be funded with Rs 6,730 crore of debt and Rs 3,360 crore of equity.

 

The sponsors will be required to make 25 percent equity contribution upfront before the first disbursement of loan. IHB’s sponsors are Indian Oil Corporation (50 percent stake), Hindustan Petroleum Corporation (25 percent stake) and Bharat Petroleum Corporation (25 percent stake), and are collectively referred to as oil marketing companies (OMCs). IHB is looking at loan tie-ups with multiple banks.

 

IHB provides a business advantage for the sponsors by providing a dedicated facility for moving LPG from their own facilities and import terminals to the consumer market in the parts of western, northern, and central India. The proposed pipeline will connect 22 LPG bottling plants of the OMCs in Gujarat, Madhya Pradesh, and Uttar Pradesh.

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