RIL-BP JV will compete with others to access RGTIL pipelines

NEW DELHI: Reliance Industries and BP’s proposed gas marketing joint venture will have to compete with others to access pipeline networks of Reliance Gas Transportation Infrastructure (RGTIL), a company privately held by Mukesh Ambani and promoters of RIL. A RGTIL spokesman ruled out any possibility of the company’s merger with the proposed RIL-BP gas business. “In our understanding, the proposed JV between RIL and BP, in its capacity of sourcing and marketing of natural gas/LNG, may access pipeline infrastructure of the RGTIL like other entities ,” spokesman of RGTIL said. As creation of gas pipeline infrastructure is capital intensive and monopolistic in nature, gas transportation companies rent out their capacities to suppliers on common carrier principle, an expert with the Petroleum and Natural Gas Regulatory Board (PNGRB) said requesting anonymity.

The board, a downstream regulator, ensures fair competition in natural gas storage and transportation business. On February 21, RIL and BP announced that they would form an equal JV to market imported liquefied natural gas (LNG) and domestically available gas through existing pipelines and "accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas in India." RGTIL currently operates the $3.75 billion East-West gas pipeline from Kakinada (Andhra Pradesh), the land-fall point of country's biggest gas producing fields in the Krishna-Godavari basin , to industries hubs of Karnataka, Maharastra and Gujarat.

It will also connect all major industrial towns in southern India and in the eastern coast up to Haldia (West Bengal), through four other pipelines are expected to be commissioned in the next two years. The RGTIL official said that other pipeline projects — namely Kakinada-Haldia , Kakinada-Chennai , Chennai-Tuticorin and Chennai-Bangalore-Mangalore pipelines — “are under various stages of implementation and would be commissioned by 2013 subject to necessary statutory approvals as well as gas availability." All pipeline projects of RGTIL were authorised by the government before the formation of PNGRB. “Necessary documentation for acceptance/regularisation of authorisation has been submitted to the PNGRB.