Reliance sell East-West Pipeline Brookfield Rs 13000 cr

Reliance to sell East-West Pipeline to Brookfield for Rs 13000 cr

4:34 AM, 15th March 2019
Reliance logo

MUMBAI, INDIA: India Infrastructure Trust, an InvIT set up by Brookfield Asset Management to acquire East-West Pipeline (Pipeline) from Reliance Industries Ltd (RIL) for Rs. 13,000 crore.

Brookfield has filed a preliminary placement memorandum, in terms of which India Infrastructure Trust, an InvIT set up by Brookfield as Sponsor and 90 percent investor, will invest Rs. 13,000 crore to acquire the East-West Pipeline (Pipeline), RIL said.

As a part of the transaction, the InvIT will acquire 100 percent equity interest in Pipeline Infrastructure Private Limited (PIPL) which currently owns and operates the Pipeline.

Pursuant to this acquisition by Brookfield, the existing pipeline usage agreement has been reworked as follows:

• The reserved capacity reduced to 33 MMSCMD against the 56 MMSCMD.

• Any unutilized capacity payment by RIL will be the difference between Rs. 500 crore a quarter and actual revenue earned by PIPL.

• RIL will continue to be entitled to transport gas, either by itself or of any customers, free of cost against any outstanding unutilized capacity payments.

At the current approved final tariff of Rs. 71.66/MMBTU, if the average volume of gas transported is 22 MMSCMD, RIL will not be liable to make unutilized capacity payments. The next review of tariff in April 2020 will also consider upward revision to tariff arising from determination of lower revised capacity of the pipeline.

Considering the new investments in the upstream sector in the KG basin, and the growing LNG imports, ability to swap gas, the average volume expected to be transported through the pipeline is expected to be significantly higher compared to the current levels.

RIL will be entitled to a significant participation in the net earnings of PIPL under the mechanism specified in the pipeline usage agreement. RIL’s current investment in preference shares valued at Rs. 4,000 crores to continue and will be converted into equity at the end of 20 years. Further, at the end of 20 years, RIL has the right to acquire equity shares of PIPL held by the InvIT at an equity value of Rs. 50 crore.

© Worldofchemicals News



Your Comments (Up to 2000 characters)
Please respect our community and the integrity of its participants. WOC reserves the right to moderate and approve your comment.

Related News

McDermott starts up largest ever CDAlky reactor in China

HOUSTON, US: McDermott International Inc has successfully commercialised and started up its single largest CDAlky reactor to date at PetroChina's ...

Read more
Celanese to increase prices for Ateva EVA Polymers

DALLAS, US: Celanese Corporation said that it will increase selling prices for Ateva EVA Polymers. This price increase is for orders shipped to Asia a ...

Read more
Arkema, Hexcel to open joint R&D lab in France

COLOMBES, FRANCE: Arkema and Hexcel said that they will open a joint research and development (R&D) laboratory in Les Avenieres (Isere), France in ...

Read more
Haldor Topsoe to sell 30 percent stake to Temasek

LYNGBY, DENMARK: Haldor Topsoe Holding A/S has signed an agreement to sell 30 percent of its shares to Temasek. Closing of the agreement is ...

Read more
Rochling inaugurates €2.5 million plant in Vadodara

VADODARA, INDIA: Roechling Engineering Plastics (India) Pvt Ltd has inaugurated its second plant in Vadodara, India. The new plant and equipment bring ...

Read more
Hexion launches new epoxy solution for aerospace composites production

COLUMBUS, US: Hexion Inc has launched a first-of-its-kind, two-component epoxy manufacturing solution. This will relieve production constraints for ae ...

Read more