GSPC-led consortium sole bidder for Gujarat Gas

Vol 15, PW 19 (05 Apr 12) Midstream & Downstream

It’s the stuff of a Hindi soap opera.

Gujarat Gas will return to the welcoming arms of its long-lost Indian mother, the Gujarat government, as ‘foreign’ stepmother BG humbly exits the scene. PETROWATCH learns a consortium led by state-owned GSPC was the only one to submit a final 'binding bid' for BG’s 65.12% stake in its south Gujarat retail subsidiary Gujarat Gas by the 9pm deadline on March 15.

“We (the state government) may take over Gujarat Gas with an official announcement anytime,” confirms a source. Seven others in the race surprisingly stayed away, including favourites Gautam Adani-controlled Adani Gas and Torrent - both pulled out hours before the deadline.

Some suspect Gujarat chief minister Narendra Modi might have played a role. “Gautam Adani and (Torrent Chairman) Sudhir Mehta are like Modi’s right and left hands,” comments an industry source.

“There’s more going on than meets the eye.” Last week GSPC held a series of hectic meetings with consortium partners ONGC and Bharat Petroleum before submitting a thick file to BG, including financial backing documents from banks and financial institutions.

“BG wants to individually verify our information with all the banks we have listed and will get back to us within three days,” confirms a GSPC source on March 31. Most bidders who stayed away cite the fact that the marketing exclusivity guaranteed to Gujarat Gas for its gas pipeline networks in Surat, Bharuch and Ankleshwar ends in 2014.

After that, any competitor can make inroads. Doubts about the security of gas supply sources were also a deterrent.

“Gujarat Gas is increasingly forced to rely on R-LNG for almost 50% of its supply basket as domestic gas supplies dry up,” we hear.