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RIL to bid for pipeline project in Mexico

Nevin John & Pb Jayakumar  |  Mumbai 

Reliance Industries (RIL), India’s largest private sector firm by market capitalisation, is planning a foray into the global pipeline construction business with a bid for building Rs 3,000 crore worth of oil and gas pipeline in Mexico.

The company, which built a pipeline worth Rs 20,000 crore from Kakinada in Andhra Pradesh to Bharuch in Gujarat for transporting natural gas from its Krishna-Godavari (KG) basin, will be scouting for opportunities abroad, as its pipeline division itself has the size of a mid-cap company, said an executive who did not wish to be identified.

Mexico’s state-owned oil company, Petroleos Mexicanos, had recently announced it would take bids from international firms to build a $600 million, 230 km, natural gas pipeline to increase transmission capacities in the central and western parts of the country. The award will go to the lead bidder within six months.

An RIL spokesperson declined to comment on the developments. However, the executive said, “We are looking to cash in on our construction and engineering expertise. The successful completion of our first project gives us confidence to grow the business separately.”

RIL has also expressed its desire to build two pipelines in India, which are yet to get the government’s nod. The two projects from Kakinada, to Tuticorin in Tamil Nadu and to Bardhaman in West Bengal, will require the same investment incurred for the first pipeline, said other company sources.

RIL’s first pipeline, spanning 1,440 km, had become operational five months earlier, along with the beginning of gas production from the KG basin. The pipeline, which is the country’s longest for gas transportation, was constructed in three years. More than 1,500 workers, including skilled ones from China, had worked to lay the pipeline, coordinated by offices in Mumbai and Kakinada.

First Published: Wed, September 02 2009. 01:08 IST