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Oil ministry seeks nod to split GAIL, pipeline business may be sold later

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The Oil Ministry has moved a Cabinet note seeking approval for hiving off state-owned gas utility GAIL (India) Limited’s pipeline business into a separate entity for a possible sale to a strategic investor at a later date, sources privy to the development said.

 

GAIL is India’s biggest natural gas marketing and trading firm and owns more than 70 per cent of the country’s 16,981-km pipeline network, giving it a stranglehold on the market.

 

It will continue to execute the gas sales agreements it has already signed and will be responsible for the discharge of the obligation under purchase pacts including for import of LNG.

 

The Ministry last month floated a note for consideration of the Union Cabinet for transferring the pipeline business into a 100 per cent subsidiary. The proposal involves separating the accounts of the pipeline division as well as transferring employees directly connected with the pipeline operations to the new subsidiary, they said adding a suitable name for the subsidiary is being mulled over.

 

The Cabinet, they said, is likely to consider the proposal shortly.

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