The Infrastructure Leasing & Financial Services (IL&FS) will, like ICICI, also hold a 10 per cent stake in the company. The rest 40 per cent is proposed to be offered to other financial investors like the Infrastructure Development Finance Corporation, SBI and UTI. The process is expected to be greatly facilitated with ICICI's decision to participate in the equity of the company. Sources say Petronet is keen at this stage to induct such financial investors and not strategic investors like L&T which have also expressed an interest inpicking up a stake. Even if this were to happen at a later stage, Petronet has reiterated that this would not necessarily translate into awarding the pipeline construction contract to the company as others could also have a fair chance of bidding for it. L&T was, reportedly, keen on participating as a partner in Petronet's projects as it would have given the company enormous long-term advantages.

Eventually, the common carrier principle would become a profitable proposition in a deregulated scenario. Also, the outgo for a stake of up to 10 per cent would have worked out to a nominal amount.

Petronet has already appointed ICICI and its investment banking arm, I-Sec, as financial advisors for its three pipeline projects involving an investment of nearly Rs 1,200 crore. The two will suggest the optimal method of raising resources through a cost-effective and innovative package.

The three projects are the Vadinar-Kandla, Kochi-Karur and the Mangalore-Bangalore pipeline networks. The financial closure,syndication and due diligence on these projects is expected to be submitted by the middle of this year.

Petronet shortlisted ICICI and I-Sec after a detailed evaluation of a dozen candidates. By way of an elimination process, the list was down to five which, apart from ICICI and I-Sec, also included SBI Caps, the Industrial Development Bank of India and JM Financial and Investment Consultancy Services.

Petronet has planned six other pipeline projects for which detailed feasibility reports (DFRs) are already underway for four. The total investment for these projects is expected to be well over Rs 2,000 crore. DFRs are being prepared for pipelines connecting Bina-Jhansi-Kanpur-Lucknow; Chennai-Tiruchi-Madurai; Koyali-Ratlam; and Paradip-Jamshedpur-Ranchi.

The fifth pipeline under consideration by the board is an exhaustive network linking Numaligarh, Jorhat, Guwahati, Bongaigaon, New Jalpaiguri and Barauni. The sixth which is also being examined by the board will stretch from Bhatinda to Udhampur withlinks at Jalandhar, Pathankot and Jammu.

Petronet will hold a 26 per cent stake in all these projects with the operating refining company holding a like percentage. For the Vadinar-Kandla pipeline, IOC will also hold 26 per cent with Reliance Petroleum and Essar Oil picking up 13 per cent each. As regards Kochi-Karur, BPCL will hold 26 per cent while Cochin Refineries will be given the option of picking up to 23 per cent. HPCL and Mangalore Refinery and Petrochemicals will hold 26 per cent each along with Petronet for the Mnagalore-Bangalore pipeline. IL&FS will pick up 5 per cent in these three projects which have been cleared by the Petronet board.