‘Gazprom, Marubeni, Turkish firms eye Istanbul gas grid sale’

ANKARA/ISTANBUL-Reuters

Turkey will start the sale of Istanbul’s İGDAŞ gas grid this month, with Russia’s Gazprom, Japan’s Marubeni Corp and Turkey’s Enerya and Aygaz among the interested bidders, sources close to the process have said.

The İGDAŞ network serves more than 5 million customers in Turkey’s largest city and sold 5 billion cubic meters of gas last year, generating 4.6 billion Turkish Liras ($2 billion) of revenue and a 279 million lira net profit.

“Appetite is huge for the distribution network of a city with the most consumption in the country. A lot of companies are waiting for the tender advertisement,” one of the sources familiar with the privatization plans said.

Natural gas distributor Enerya confirmed it was interested in the İGDAŞ sale. Gazprom did not respond to calls seeking comment, while officials at trading house Marubeni were not immediately available to comment.

Liquefied propane gas company Aygaz said it would make a decision after seeing the tender documents.

“The Turkish government is putting two very valuable assets up for sale in the market - İGDAŞ and the highways and bridges - to test investors’ appetite,” a second source close to the privatization process told Reuters.

“Gazprom, Enerya, Marubeni and Aygaz are among the interested bidders (for İGDAŞ),” the source said.

Banking and government sources told Reuters on Nov. 3 that Turkey was also reviving plans to privatize two bridges across the Bosphorus Strait in Istanbul and some motorways and aims to start the process by the first quarter of 2015.

A draft law regulating Turkey’s natural gas market, which includes clauses regarding the privatization of İGDAŞ, is still before parliament, a second source said, but is expected to pass to enable the sale process to go ahead.

IGDAS belongs to the Metropolitan Municipality of Istanbul, which will hold the sale, rather than the privatization administration, the sources said.

Turkey’s total gas consumption this year is expected to be around 48-49 billion cubic meters.

Turkey sold the natural gas distribution network Başkent Gaz in the capital Ankara, the second-largest gas grid company after İGDAŞ, in January 2013. Torunlar Gıda, which has interests in construction, real estate and agriculture, placed the highest bid of $1.16 billion.