GAIL evaluating stake buy in Mukesh Ambani's RGTIL
State-owned gas utility GAIL India Ltd is evaluating buying stake in Mukesh Ambani's privately owned Reliance Gas Transportation Infrastructure Ltd (RGTIL).
New Delhi: State-owned gas utility GAIL India Ltd is evaluating buying stake in Mukesh Ambani's privately owned Reliance Gas Transportation Infrastructure Ltd (RGTIL).
"Gas transmission is our core business. We are evaluating the opportunity and will take a decision at a suitable time," GAIL Chairman and Managing Director B C Tripathi told reporters here.
"Our decision will be based on commercial, technical and legal due-diligence," he said.
In May, at least 11 companies, including GAIL and Oil India Ltd, expressed interest to buy stake in RGTIL.
The two firms submitted separate EoIs for the stake buy, which was being managed by JP Morgan, Citi and SBI Caps.
However, the fate of the expression of interests (EoIs) called by RGTIL are not clear.
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 million standard cubic metres per day.
But with KG-D6 output plummeting to less than 26 mmscmd, he wants to sell the gas pipeline business.
RGTIL today operates a 1,396-km East-West gas pipeline. The 80 million standard cubic meters per day capacity, 48-inch pipeline from Kakinada in Andhra Pradesh to Bharuch in Gujarat ferries natural gas from KG-D6 fields.
Relogistics Infrastructure Ltd (Relog), a subsidiary of RGTIL, had won government authorisation to lay Kakinada-Basudebpur-Howrah pipeline, Kakinada-Chennai line, Chennai-Bangalore-Mangalore pipeline and Chennai?Tuticorin line.
But authorisation for these pipelines have been cancelled by the oil ministry because of little progress.