Eleven firms including state-run GAIL (India) and Oil
India have bid to buy stake in billionaire Mukesh Ambani’s privately
owned firm Reliance Gas Transportation Infrastructure (RGTIL).
“There
are five Indian and six foreign companies that have submitted
expression of interest (EoI) for buying stake in the gas transportation
company (RGTIL),” a source privy to the development said.
Gas
utility GAIL and oil explorer OIL have submitted separate EoIs for the
stake buy, which is being managed by JP Morgan, Citi and SBI Caps.
Other firms which have put in EoI may include NYSE-listed energy major Enbridge.
A company spokesperson declined to comment.
The
source said the companies that have submitted EoI would visit data room
of RGTIL and do a complete due diligence before making any financial
bid.
RGTIL was originally a subsidiary of Reliance
Industries Ltd (RIL) and was incorporated in March 2003 to transport
natural gas from eastern offshore gas fields to consumption centres. Two
years later, it was transferred to Mr Mukesh Ambani, Chairman of RIL.
It
was said at that time that Mr Ambani may sell stake in the company
through an initial public offering (IPO) once RIL’s eastern offshore
KG-D6 field hit peak volumes of 80 mmscmd.
But with KG-D6 output plummeting to less than 34 mmscmd, he wants to sell the gas pipeline business.
Industry
sources said RGTIL earlier this month held a meeting of its
shareholders in Jamnagar, where its registered office is located, to
seek approval for the stake sale. The stake sale was approved at the
meeting.
RGTIL operates a 1,396-km East-West gas
pipeline. The 48-inch pipeline from Kakinada in Andhra Pradesh to
Bharuch in Gujarat ferries natural gas from KG—D6 fields. But the 80
million standard cubic meters per day capacity line is operating at less
than half of its capacity as output from KG—D6 field has plummeted.
Relogistics
Infrastructure Ltd (Relog), a subsidiary of RGTIL, has won government
authorisation to lay Kakinada-Basudebpur-Howrah pipeline,
Kakinada-Chennai line, Chennai- Bangalore-Mangalore pipeline and
Chennai-Tuticorin line but work on these pipelines haven’t started
because of uncertainty about availability of gas.
RIL
is the operator of KG-D6 block with 60 per cent stake while UK-based BP
Plc has 30 per cent interest. Canada’s Niko Resources owns the
remaining 10 per cent.
While GAIL is nation’s largest
pipeline utility by capacity, with a network of 8,500 km, OIL is keen
on entering the gas business.
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