11 cos including GAIL, OIL eye stake in Mukesh Ambani's RGTIL

Stake buy being managed by JP Morgan, Citi, SBI Caps

At least 11 companies, including state-owned GAIL (India) and Oil India, have expressed interest 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 India 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.

The source said the companies putting in EoI would visit dataroom 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 plummetting 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 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, has won government authorisation to lay Kakinada-Basudebpur-Howrah pipeline, Kakinada-Chennai line, Chennai-Bangalore-Mangalore pipeline and Chennai–Tuticorin line.

RIL is the operator of KG-D6 block with 60% stake while UK-based BP Plc has 30% interest. Canada's Niko Resources owns the remaining 10%.

While GAIL is nation's largest pipeline utility by capacity, with a network of 8,500 kilometers, Oil India is keen on entering the gas business.