State-owned gas utility GAIL (India) is reportedly considering establishing an Infrastructure Investment Trust (InvIT) to monetise the Dahej-Uran-Panvel-Dabhol and Dabhol-Bengaluru pipelines in India.
The Dahej-Uran-Panvel-Dabhol pipeline runs from Gujarat to Maharashtra, while the Dabhol-Bengaluru pipeline project traverses from Dabhol, Maharashtra to Bangalore, Karnataka.
The latest move comes ahead of GAIL’s planned separation of its pipeline business from the gas marketing function, reported Press Trust of India (PTI), citing two undisclosed sources with direct knowledge of the matter.
GAIL is mulling bifurcation of its two jobs to address conflicts such as unfair access to the firm’s pipeline network to transport their fuel due to the same entity owning two jobs, the sources said.
Following the bifurcation, GAIL’s would focus on the marketing of natural gas and petrochemical production.
The InvIT would initially involve divesting 10-20% of its stake, according to the sources.
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By GlobalDataAn undisclosed official was reported by Times of India as saying: “There could be gradual dilution, say in tranches of 10-20% stake, to begin with, but GAIL will retain majority stake.”
InvIT (An Infrastructure Investment Trust) is a collective investment scheme similar to a mutual fund. It facilitates the direct investment of small amounts of cash from individuals or institutional investors in infrastructure.
Currently, GAIL operates a combined 12,502kms of natural gas pipeline network, with a majority located in the western, southern, and northern parts of India.
In late 2020, the company announced the completion of 444km-long Kochi-Mangalore natural gas pipeline project in Southern India, with an investment of $770m.
The pipeline, which passes through Kochi in Kerala to Mangalore in Karnataka, supplies nearly 3.8 million cubic metres per day (mcm/d) of gas to Kochi.
