UPDATE 1-Gas Natural has 6-7 bidders for Madrid assets

* Says sale to take another two months

* Shares down 1.0 percent

(Adds background, share price)

MADRID, Nov 3 (Reuters) - Spanish power company Gas Natural (GAS.MC) has six or seven potential bidders for its gas distribution assets in Madrid but the sale process could last another two months, its chief executive said on Tuesday.

Gas Natural had set a deadline of Sept. 21 for non-binding offers for the Madrid gas network as part of a string of asset disposals aimed at reducing a 22 billion euro ($32 billion) debt pile before the end of the year.

"(The sale) will take a couple of months," Rafael Villaseca said at an energy event in Madrid.

By 1303 GMT, Gas Natural shares were down 1.0 percent at 13.6 euros, compared with a 2.0 percent decline on Spain's blue-chip stock index .IBEX.

The deal, which sources said could fetch more than 500 million euros, was expected to attract both energy firms and infrastructure funds thanks to the regulated cash flows involved. [ID:nL7604522]

Portuguese fuel and oil producer Galp Energia (GALP.LS) has already expressed an interest and infrastructure funds from CVC Capital Partners, Morgan Stanley (MS.N), Prudential (PRU.L) and Allianz (ALVG.DE) were also seen as considering offers.

Possible bidders among European utilities include Spanish power company Iberdrola (IBE.MC) and Italian power group Enel's (ENEI.MI) Spanish unit Endesa (ELE.MC) which operates gas distribution elsewhere in Spain.

German utility E.ON (EONGn.DE), which is expanding its presence in Spain, may also be interested in the assets. (Reporting by Jonathan Gleave, writing by Tracy Rucinski; Editing by Dan Lalor) ($1 = 0.6835 euro)