RIL, Pioneer look to exit US gas pipeline JV

NEW DELHI: Mukesh Ambani-led Reliance Industries Ltd (RIL) is contemplating selling its 49.9% stake in its US-based joint venture (JV) that owns 460 miles of pipeline network for transportation of shale oil and gas.

RIL, as well as its JV partner Pioneer Natural Resources Co, are seeking a buyer for their stakes in Eagle Ford Shale’s (EFS) midstream business, as they shift focus to shale oil production.

“Pioneer Natural Resources today announced that the com- pany is pursuing the divestment of its 50.1% share of the Eagle Ford Shale’s midstream business… Reliance Holding USA, Inc owns the remaining 49.9% of the EFS midstream business and also plans to pursue the divestment of its share in a joint process with Pioneer,” the Dallas-based independent oil and gas producer said in a statement.

RIL, through its subsidiary Reliance Holding USA, had acquired 49.9% stake in EFS Midstream LLC in June 2010. Its current investments in EFS Midstream LLC are worth $ 208 million (`1,352 crore).

It is projected to generate $100 million in cash flow next year. Pioneer is the operator of the business. The sale “would allow us to strategically redeploy capital to our core, oil-rich Spraberry/Wolfcamp assets in the Permian Basin of West Texas,” Pioneer’s chairman and chief executive officer, Scott Sheffield said.

Pioneer, however, said it has no plans to sell its stake in the Eagle Ford Shale’s oil and gas producing assets.

The US firm holds 46% stake in the upstream venture while RIL holds 45% and Newpek LLC holds the remaining 9%.