GSPC offers up to 25% in Gujaratآ’s gas grid

Vol 6, PW 6 (22 May 02) People & Policy
     

Next month Gujarat State Petroleum should have a clearer idea about who will buy minority stakes in a gas grid promoted by its subsidiary Gujarat State Petronet.

PETROWATCH learns GSPC is talking to Shell, British Gas, and fertiliser co-operative KRIBHCO, GAIL, Indian Oil and Bharat Petroleum. "Discussions are at an advanced stage," we learn.

"We are willing to offer anything between 10% and 25% to an individual company." Originally GSPC planned to sell a maximum 11% stake but that has changed. It could now choose to offer stakes to either some or all the six companies put together.

"All of them have stakes in the gas industry," he adds. "The only issue is will they be comfortable working together." GSPC claims there are no areas of dispute.

But PETROWATCH understands that two issues are troubling potential investors. One is the lack of a gas transmission agreement.

Two is uncertainty over gas regulation in Gujarat following Delhi's decision to include gas in downstream legislation before parliament. GSPC doesn't like talking about these issues.

Anyone who insists on clarity - like Gaz de France - is shown the door. "They set conditions," he adds.

"They wanted clarity on the regulatory regime before talks. Now we are not talking to them.

Others have no such concerns." Not true, we learn. "None of us are willing to put money unless we have answers, one bidder tells us.

Getting 25% is no great attraction, there is no value addition, I'd rather take a minimum stake unless I get management control."