Three Bidders All Eye Istanbul Gas Grid

Turkey will start the sale of Istanbul's IGDAS 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 said.

The IGDAS network serves more than 5 million customers in Turkey's largest city and sold 5 billion cubic metres of gas last year, generating 4.6 billion lira ($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 privatisation plans said.

Natural gas distributor Enerya confirmed it was interested in the IGDAS 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 - IGDAS and the highways and bridges - to test investors' appetite," a second source close to the privatisation process told Reuters.

"Gazprom, Enerya, Marubeni and Aygaz are among the interested bidders (for IGDAS)," the source said.

Banking and government sources told Reuters on Monday that Turkey was also reviving plans to privatise 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 privatisation of IGDAS, 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 municipality of Istanbul, which will hold the sale, rather than the privatisation administration, the sources said.

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

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

By Asli Kandemir and Seda Sezer