Reliance Gas Corporation to get 67% equity in Andhra gas consortium

November 10, 2008 · Filed Under Reliance Industries 
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The Andhra Pradesh government has decided to restructure the equity pattern of the Krishna-Godavari Gas Network (KGGNL) to include Reliance Gas Corporation (RGC), a subsidiary of Reliance Industries, as a majority partner of the consortium.

KGGNL, a special purpose vehicle set up for the development of the natural gas network in the state, is a joint venture of Infrastructure Corporation of AP (Incap), Gujarat State Petroleum Corporation (GSPC) and Infrastructure Development Finance Corporation (IDFC).

According to the restructured equity pattern, RGC will hold 67 per cent, while the state government, GSPC and IDFC will have 11 per cent stake each. At present, IDFC has 48 per cent stake, AP and GSPC have 26 per cent holding each. The state Cabinet, which met here on Monday, approved the proposal to restructure the equity pattern.

According to Union Information Minister A Ramnarayana Reddy, the state government has decided to make RGC a consortium partner as it is the only company, which can start supplying gas immediately. RGC has struck huge gas reserves in the K-G basin.

“Due to certain developments regarding the availability of natural gas in the K-G basin, it is observed that GSPC may not be able to supply gas until at least 2011-12, which means that KGGNL has to wait for three more years if it has to develop the gas network,” the minister said.

Keeping this in view and to expedite city gas distribution in the state, the state government has decided to rope in RGC, he added. Briefing newspersons following the Cabinet meeting, Reddy said the restructured KGGNL would soon submit bids to the Petroleum and Natural Gas Regulatory Board (PNGRB), constituted by the central government, for laying the gas distribution network. The board has already received bids from RGC to lay the gas pipeline network in Hyderabad, Kakinada, Tirupati, Vijayawada, Visakhapatnam and Rajahmundry.

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