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Informist, Tuesday, Jun 23, 2026

 

--Sources: Gujarat Energy mulls moving Mundra LNG unit out of SEZ

--CONTEXT: Gujarat Energy has 5 mln tn/year LNG terminal at Mundra

--Sources: Moving LNG unit out of SEZ aimed at utilising tax breaks

 

By Sunil Raghu

 

AHMEDABAD - Gujarat Energy Ltd., formerly known as Gujarat Gas Ltd., is considering getting its 5 million tonnes per annum liquefied natural gas terminal at Mundra notified as an entity located in the domestic tariff area, instead of the special economic zone, three government officials aware of the development said.

 

"The group underwent restructuring recently and the group is keen to encash the benefit to offset nearly INR 72 billion of past losses on the books of Gujarat State Petroleum Corp., against future profits over few years," a senior official aware of the development said. "Taking the terminal out of SEZ would be another step in this direction."

 

As part of the restructuring, GSPC LNG Ltd., which owns and operates the Mundra LNG terminal, became a subsidiary of Gujarat Energy Ltd., bringing LNG regasification, gas trading, and downstream gas distribution businesses under a more integrated structure.

 

Operational since 2020, the Mundra LNG terminal handles LNG imports, storage in cryogenic tanks, regasification unit and pipeline injection. It is connected to Gujarat gas grid for industrial, power, and city gas supply through an 18-inch pipeline. Currently, it supplies imported natural gas to ceramic tile manufacturing units in Morbi. Gujarat State Petroleum Corp. holds nearly 37% stake in the LNG terminal, followed by Gujarat Maritime Board with 32%, the government of Gujarat and its entities with about 28%, and Adani Enterprises Ltd. with about 3% stake.

 

Another official said that being in an SEZ had helped the company save on customs duty on imports of equipment to set up the the terminal. It also saved on goods and services tax on supplies and services as it was part of the SEZ. "This helped in better project economics and lower upfront capex. These, nor many other tax benefits are now no longer available as the project is now operational. It makes no financial gain to be in SEZ," the second official said. "None of the LNG terminals in the country, except Mundra, is within an SEZ area."

 

However, another senior official with Gujarat Energy Ltd., while confirming that there are talks regarding removal of SEZ status for the Mundra LNG terminal, said this was unlikely to happen soon. "These are initial talks and the project itself is facing legal challenges, with GSPC and Adani group locked in a disagreement over payment of dues for construction of the project," he said. "Adani group has been seeking nearly INR 18 billion in payment for construction of infrastructure, while Gujarat Energy says it has already paid over INR 8 billion, that is due to Adani group. The case is now before the Bombay High Court."

 

For the March quarter, Gujarat Energy had reported a net profit of INR 5.21 billion on revenue of INR 59.76 billion. On Tuesdday, shares of Gujarat Energy, which is still being traded as Gujarat Gas, closed nearly 1% lower at INR 369.30 on the National Stock Exchange.  End

 

Edited by Avishek Dutta

 

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