GAIL bids for Repsol's Atlantic LNG

GAIL India, the country’s biggest gas transmission player, has bid for one of the world’s biggest liquefied natural gas (LNG) projects – the 11.5 million tonne per annum (mtpa) Atlantic LNG located in Trinidad and Tobago, owned by Spain’s Repsol and other energy majors.

B C Tripathi, chairman and managing director, GAIL India, confirmed that GAIL – with its UK-based partner EDF – recently placed a non-binding bid for the LNG assets.

The two companies intend to go ahead with the bidding process if shortlisted, he said after announcement of the third quarter results, but did not talk about the possible valuation.
GAIL tied up with the EDF last week to bid for natural gas and shale gas assets. It also signed a contract to source liquefied natural gas from EDF.

Repsol, Spain’s biggest integrated oil and gas player, is currently saddled with a massive debt burden and has been looking to sell its stake in the profitable Atlantic project since last year. It is also hiving off other LNG projects in Canada and Peru at a total valuation of $2 billion – including the Atlantic project – but has met with no success because of regulatory issues.

Analysts did not attribute much value to the news, saying it would be a long time before bids are finalised. Besides, going by international media reports, GAIL is pitted against energy giants such as China’s Sinopec, Russia’s Gazprom and France’s GDF Suez (in consortium with China’s sovereign wealth fund CIC).
For the quarter ended December, GAIL reported numbers better than street estimates. Topline grew 10.8% year-on-year to `12,474 crore – mainly due to higher-than-expected sales in the natural gas trading segment, which grew 10.6% on-year to `10,118 crore, respectively – while operating profit improved 13.7% to `2,002 crore. Its fuel subsidy burden stood at `700 crore for the quarter.

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