Brookfield in $2bn Indian Gas Pipe Deal: Report

Canada-based asset management firm Brookfield Asset Management is expected to buy Reliance Industries’ Indian gas pipeline business, according to a report published in Economic Times September 17.

The deal, which has an enterprise value of $2bn, has been approved by the Indian competition watchdog. The loss-making East West Pipeline (EWPL), earlier known as Reliance Gas Transportation Infrastructure, will be bought by Brookfield-sponsored India Infrastructure Trust, Economic Times reported.

Brookfield has also filed an application with the Indian securities regulator for registering the trust, approval for which is expected this month, following which a formal joint announcement will be made, sources told the newspaper.  

The pipeline housed under EWPL is being transferred to an entity called Pipeline Infrastructure Private (PIPL), a wholly owned subsidiary of Reliance Industries Holding (RIHPL), which is a holding arm of Mukesh Ambani and family, the promoters of Reliance Industries. The 1400 km East West Pipeline supplies gas from Reliance Industrie’s KG Basin gas fields on India’s east coast to user on India’s west coast. The pipeline is also connected with other pipelines on the route which are operated by Gail and Gujarat State Petronet.  

Brookfield has been an avid acquirer of midstream gas assets worldwide. In the past two years it committed $5.6bn to buying key pipeline interests in South America from Petrobras and Spain's Naturgy, while in July 2018 it agreed to buy Enbridge's western Canadian gas gathering and processing business for C$4.31bn (US$3.3bn) cash. In contrast Brookfield was on the sell-side of a recent Australian upstream deal.