| Reliance Industries is in talks with IDFC Private Equity to acquire the latter’s 48 per cent stake in city gas firm, Krishna Godavari Gas Network. (KGGNL), a senior Andhra Pradesh government official said. |
| Krishna Godavari Gas Network is a joint venture between the Andhra Pradesh government, Gujarat State Petroleum Corporation and IDFC Private Equity. |
| “RIL is keen on holding a controlling stake in KGGNL. GSPC is also keen on this. But, IDFC PE is in favour of RIL for the deal,” the state government official said in Hyderabad. KGGNL was planned to source gas from GSPC’s KG Basin block. |
| While IDFC holds 48 per cent in the company, Gujarat State Petroleum and Andhra Pradesh Industrial Development Corporation the investment arm of the Andhra Pradesh government, hold 26 per cent each. |
| Confirming the development, a senior RIL official said: “Yes, we are talking to IDFC Private Equity. We are looking for a bigger stake in KGGNL.” |
| KGGNL was formed to build natural gas transportation network in Andhra Pradesh for supplying gas to be produced from offshore Krishna-Godavari Basin to industrial and domestic consumers within the state. |
| KGGNL was planned to source gas from GSPC’s KG Basin block. |
| RIL also has made several gas discoveries in KG Basin, including the D6 Block, which is expected to start production in the second half of the current financial year that started April 1, 2008. |
| The RIL official said a majority stake in KGGNL would make a strategic business proposition for the company, as it is keen to sell gas in Andhra Pradesh and also enter city gas distribution. |
| “Andhra government wants priority on D6 Block gas. We have no problems supplying more gas to the state to meet its demand provided we get the right price,” the RIL official said. |
Source: Business Standard