Reliance Industries, leading private sector enterprise with businesses in the energy and materials value chain, today said it has sold its entire 49.9% interest in a US shale oil and gas pipeline joint venture to New York-listed Enterprise Products Partners for USD 1.07 billion.
Reliance and its partner Pioneer Natural Resources Co sold off Eagle Ford (EFS) Midstream venture, that owns a 460 miles pipeline network, to Enterprise Products Partners for USD 2.15 billion.
Enterprise in a statement said, "The purchase price will be paid in two instalments with the first instalment of USD 1.15 billion paid at closing and the final instalment of USD 1 billion paid no later than the first anniversary of the closing date."
EFS Midstream venture was formed in 2010 to construct facilities to provide gathering and handling services for condensate and natural gas produced from wells on dedicated acreage in the Eagle Ford.
RIL, through its subsidiary Reliance Holding USA Inc had acquired 49.9% stake in EFS Midstream LLC in June 2010.
The Midstream system consists of 10 gathering plants and about 460 miles of pipelines. The system gathers and separates produced condensate from produced gas. It also stabilises the condensate, where necessary, and treats the gas produced from the Eagle Ford upstream joint venture operated by Pioneer with 46%.
RIL holds 45% interest in the Eagle Ford upstream joint venture and the rest 9% is with Newpek LLC. It is being speculated that RIL may be looking at selling this stake as well. RIL, which bought 45% interest in Pioneer Natural Resources Co's Eagle Ford shale formation of south Texas for USD 1.3 billion, is working with Citigroup Inc and Bank of America Merrill Lynch to find a buyer.
Under the terms of the agreements, the Pioneer and Reliance to use the EFS Midstream for moving condensate and gas for 20 year on fee-based arrangement.
Shares of the company declined Rs 6.6, or 0.73%, to trade at Rs 894.75. The total volume of shares traded was 55,458 at the BSE (10.37 a.m., Tuesday).
