ONGC Not Interested in RIL's Pipeline Business

Oil and Natural Gas Corp is not interested in the gas pipeline company owned by Reliance Industries, the Economic Times reported.

The company, Reliance Gas Transportation Infrastructure (RGTIL), operates the $3.75-billion East-West pipeline that was built to deliver D6 gas to Karnataka, Maharashtra and Gujarat.

However, other state owned energy firms like Gail and Oil India are looking at the option.

"RGTIL's bankers had approached us recently to discuss the possibility of ONGC picking up an equity investment in RGTIL but we declined as we did not see any value in the proposition as pipelines is not our core business," a senior ONGC official told ET. 

The valuation of the Reliance owned firm may take a hit due to fall in gas production at KG-D6, which has now hit an all time low of 28.16 mmscmd, the lowest level since RIL began output from the KG-D6 block in April 2009. 

The newspaper said that other issue that may affect the stake sale.

The east-west pipeline was initially built for a capacity of 80-120 mmscmd and now it is not even transporting half of that volume, so its long-term hire charges and tariffs could be impacted negatively.