GAIL, Oil India Keen on Reliance Pipeline Business

GAIL India Ltd and Oil India Ltd are keen to acquire Reliance Gas Transportation Infrastructure Ltd, the Economic Times reported.

Reliance Gas Transportation, earlier known as Reliance Gas Pipelines Ltd, operates East-West pipeline (EWPL) that connects Kakinada to industrial hubs of Karnataka, Maharashtra and Gujarat and is up for sale as lower gas output from the Krishna Godawari Basin is unable to justify large investments in these pipelines.

Reliance Industries has been battling to revive a falling gas production at KG-D6 fields, which has been dropping since the last achieved target of 61.5 million cubic meters a day (mmcmd) in March 2010. It failed to achieve the target, due complexities in the reservoir acted as a deterrent to revive production. Natural decline in reserves was another reason cited by the company for the falling gas output.

The block has witnessed over 40% decline in production over the last 18 months to 34 mmcmd.