OREANDA-NEWS. August 18, 2011. Reliance Gas Transportation Infrastructure (RGTIL), a company promoted by Mukesh Ambani and other promoters of Reliance Industries, would need the regulatory approval before a new investor is allowed to buy stake in the company, the chairman of the Petroleum and Natural Gas Regulatory Board said.

Last month, the company held road shows to bring aboard a partner that could bring skills and value for the company, which is in the business of building gas pipelines in the country. "Prima facie it looks like RGTIL will have to take PNGRB's permission if it does plan to divest either a majority or a minority stake-holding in the company to a different entity as there is a lock-in clause for pipeline project operators and thus ownership cannot be transferred arbitrarily," L Mansingh, Chairman, PNGRB, told ET. The spokesman for RGTIL did not respond to an email questionnaire sent by ET.

RGTIL operates the USD 3.75 billion East-West gas pipeline (EWPL) that connects Kakinada to industrial hubs of Karnataka, Maharashtra and Gujarat. RGTIL recently told PNGRB that it is unable to finish two pipeline projects that will transport gas from the Krishna Godavri basin to various industrial hubs in southern India as the government has not allocated RGTIL any gas from KG for these projects.

"RGTIL made a presentation to us around three weeks ago and said that lack of allocation of gas from the KG basin is one of the primary reasons for the delay in these projects. They will be submitting more documents to us soon after which we will be issuing a formal order on the issue," said Mansingh.

RGTIL was granted the license to build two pipelines connecting Kakinada-Vizianagaram-Srikakulam and Kakinada-Ennore-Nellore-Chennai in 2007, but the company sources say that it does not make business sense to build these pipelines unless gas is available for them. A source close to the company had told ET earlier that if Reliance imports LNG, the pipelines may be built.

Mansingh also said the Andhra Pradesh Gas Infrastructure Corporation (APGIC) had submitted an expression of interest to build these two pipelines as RGTIL was going slow on these projects. Earlier this year PNGRB had questioned RGTIL on the delay in building the pipelines.