State-owned gas facility GAIL (India) Ltd plans to launch InvIT of its two gas pipelines between Dahej and Bengaluru ahead of the proposed separation of the pipeline industry from gas marketing activity, sources said .
The country’s leading gas marketing and transportation company plans to make money on the Dahej-Uran-Panvel-Dabhol pipeline and the Dabhol-Bengaluru pipeline by setting up an Infrastructure Investment Trust (InvIT), two sources told direct knowledge of the matter.
InvITs are similar to mutual funds, which allow direct investment of small sums of money from individual / institutional investors who may have the infrastructure to earn a small portion of the income in return.
GAIL will maintain a majority share in the pipelines running from Dahej in Gujarat to Dabhol in Maharashtra and from there to Bengaluru in Karnataka.
The InvIT may include selling a 10-20% stake initially, the sources said.
GAIL has a natural gas pipeline network and operates 12,502 kilometers, mainly in the west, south and north of the country. They are building more pipes in the east of the country.
Sources said that InvITs are a new infrastructure funding model and GAIL wants to use them.
The two pipes recommended for InvIT had been overwritten ₹Spending 3,000 crore.
The move comes ahead of the planned output of the GAIL pipe industry to become a 100% subsidiary.
GAIL is the largest natural gas marketing and trading company in India and accounts for over 70% of its country’s 16,981-km pipeline network, giving it market access.
Natural gas consumers have often complained that they do not “fairly” have access to GAIL’s 12,160-km pipeline network to carry the fuel.
Sources arranged to resolve the conflict arising from the same entity having two functions are considered, affecting GAIL.
GAIL’s main business after the bifurcation is the marketing of natural gas and petrochemical production. It needs to be able to hire pipes from the subsidiary and pay approved traders for the same.
Sources said a note for the split will be moved for consideration by the Cabinet shortly.
The proposal involves the separation of the accounts of the pipeline department as well as the transfer of staff directly involved in the operation of the pipeline to the new sub-group, he said. them that an appropriate name for the subgroup is being expanded.
GAIL already maintains separate accounts for its gas pipeline and marketing industries, making it easier to divide into two organizations.
By disallowing GAIL and opening up the sector, the government hopes to increase gas consumption to 15% of the energy mix by 2030, from the current 6.2%.
The government has a 54.89% interest in GAIL India.