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The capacity of the new facility is yet to be decided," said an executive at Vopak, who did not want to be named ahead of a formal announcement on the project. A top executive at Adani Ports and Special Economic Zone Ltd, the company that runs Mundra port, also confirmed that it was discussing a proposal with Vopak to set up a storage terminal. He, too, did not want to be named.

A spokesman for Stolt-Nielsen said the firm did not want to comment until it had "something concrete" to announce. Vopak could not be reached for an official comment immediately.

Vopak, the world's largest independent tank storage service provider for bulk liquids, operates 83 terminals with a storage capacity of more than 27 million cubic metres in 31 countries.

Vopak entered the Indian market in July 2011 by acquiring Gujarat-based CRL Terminals Pvt. Ltd. CRL is one of India's largest independent storage facilities for chemicals and vegetable oils, comprising two sites with a combined capacity of 262,600 cu. m at Kandla port in Gujarat

The Mundra facility would be Stolt-Nielsen's first storage terminal in India. Stolthaven, the storage terminal-operating unit of Stolt-Nielsen, runs eight terminals globally with a 2.8 million cu. m of storage capacity. Many global bulk liquid storage firms and investors are looking at opportunities in India.

The country's storage capacity is currently pegged at 25-30 million kilo litres, dominated by large public sector units.

Vopak had last year bid for buying a 74% stake in Vizag-based East India Petroleum (P) Ltd from New York-based private equity firm Global Infrastructure Partners (GIP). But the deal has floundered over valuations, said the Vopak executive mentioned earlier, who is familiar with the discussions.

"We are losing interest in East India Petroleum because of the very high ask price," the Vopak executive said. East India Petroleum, located close to the Vizag port, India's second biggest port by cargo handled, has a storage capacity of 120,000 kilo litres of oil, petroleum and lubricant products and petrochemicals and 9,000 million tonnes of liquefied petroleum gas.

Global firms such as Norwegian storage tank terminal operating firm Odfjell SE, Malaysia's state-run oil firm Petroliam Nasional Berhad (Petronas) had evinced interest in the East India Petroleum stake sale. "Odfjell and Petronas backed out without putting price bids," a person familiar with the deal said, requesting anonymity.

"We had submitted our bid a few months ago, but were told that we were not the highest bidders," said Jayanta Bhuyan, managing director of IOT Infrastructure and Energy Services Ltd, a joint venture between Indian Oil Corp. Ltd and Germany's Oiltanking GmbH, the world's second largest independent tank storage provider for petroleum products, chemicals and gases.