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To fund its infra, GAIL split plan put on hold

The Centre had earlier indicated that it would split GAIL’s pipeline and marketing businesses to address concerns of other players of having non-discriminatory access to GAIL’s pipeline network.

By: ENS Economic Bureau | New Delhi |
February 5, 2021 12:39:18 am
GAIL, which owns and operates about 60 per cent of India’s natural gas pipelines, is a key part of the central government’s plan to augment the country’s natural gas pipeline by adding over 16,000 km to the existing network of about 16,400 km of pipelines.

The government has put its plan to split GAIL’s natural gas and pipeline operating business on hold, with a view to protect the state-owned utility’s financial stability, as it undertakes major infrastructure projects to augment the country’s natural gas pipeline network, according to a senior government official.

The Centre had earlier indicated that it would split GAIL’s pipeline and marketing businesses to address concerns of other players of having non-discriminatory access to GAIL’s pipeline network.

GAIL, which owns and operates about 60 per cent of India’s natural gas pipelines, is a key part of the central government’s plan to augment the country’s natural gas pipeline by adding over 16,000 km to the existing network of about 16,400 km of pipelines.

“Our key consideration is that GAIL should be able to complete its plans to augments its pipeline network,” said a senior government official, noting that the Centre did not want to affect the state-owned company’s ability to raise funds to meet this expenditure.

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GAIL may also seek to monetise some of its existing pipelines by selling minority stakes through Infrastructure Investment Trusts, according to sources aware of the developments.

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