Brookfield has filed the preliminary placement memorandum, in terms of which India Infrastructure Trust, an InvIT set up by Brookfield as sponsor and 90 per cent investor, will invest Rs. 13,000 crore to acquire the East-West pipeline. As a part of the transaction, the InvIT will acquire 100 per cent 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: 1. The reserved capacity reduced to 33 MMSCMD against the 56 MMSCMD. 2. Any unutilised capacity payment by RIL will be the difference between Rs. 500 crore a quarter and actual revenue earned by PIPL. 3. RIL will continue to be entitled to transport gas, either by itself or of any customers, free of cost against any outstanding unutilised 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 unutilised capacity payments.
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.
