GAIL, OIL bidding for stake in Mukesh Ambani firm

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 which 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 J P 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 who have put 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 Mukesh Ambani, Chairman of RIL.

It was said at that time that 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 havent 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.