The government has nipped Oil and Natural Gas Corp's exclusive plans to extract liquid petroleum gas and C2/C3 from liquefied natural gas by also allowing gas utility GAIL India to do the same from the common LNG being imported by Petronet.

ONGC will get to extract butane, propane and ethylene from the first 5 million tonnes of LNG being imported by Petronet LNG Ltd while GAIL will extract the same from the additional 5 million tonnes to be imported from 2007-08, sources said.

Petroleum ministry last week had issued an order to this effect, they said.

ONGC had planned to invest Rs 1494 crore (Rs 14.94 billion) in the C2/C3 and LPG recovery plant. In the first phase, it had planned to set up 5 million tonnes per annum capacity plant, which was to be expanded to 10 million tonnes with the proposed doubling of Dahej LNG import capacity to 10 million tonnes by 2007.

ONGC had already floated a tender for selecting the contractor to build the plant.

Sources said state-run refiner Indian Oil Corp and GAIL challenged Petronet LNG Ltd's decision to award the C2/C3 and LPG extraction project to ONGC.

ONGC, IOC and GAIL, along with Bharat Petroleum Corp, are equal partners in Petronet LNG Ltd, the country's first LNG import firm.