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GAIL to focus on pipelines, mktg can be done by anyone:Pradhan

Press Trust of India  |  New Delhi 

Amid talk of spinning off marketing business of Ltd into a separate company, today said the state-run firm should focus on building pipelines as marketing can be done by "anyone".

Refusing to confirm or deny reports of mulling splitting into two, he said creating infrastructure to take environment friendly to uncovered parts, particularly eastern India, is a priority for the

Incorporated in August 1984 by spinning off gas business of ONGC, (India) Ltd owns and operates about 11,000-km of pipelines in the country. It sells around 60 per cent of natural gas in the country.

Several meetings have been held in the ministry on splitting GAIL by spinning off its marketing business into a separate company and selling it to a state-owned firm.

"Nothing has been finalised yet but discussions are on," said a sources with direct knowledge of the development.

Pradhan, on the other hand, said the has been taking steps to make a As part of this plan, it has even provided budgetary support of Rs 5,176 crore, or 40 per cent of the project cost, for laying of a gas pipeline from Jagdishpur in to West Bengal, and Odisha.

"This is the first instance of government funding a project from its budget," he said.

GAIL, he said, should focus on creating infrastructure that would help take natural gas to all parts of the country, especially eastern which has so far been unconnected.

"Marketing can be done by anyone," he said, responding to a question on whether government proposes to split the state- run company's pipeline and marketing businesses.

Sources said the petroleum ministry has not been very happy with GAIL's performance in building Besides, there is a possible conflict of interest in its role as a infrastructure provider and carrier.

GAIL did not start executing the Rs 12,940 crore JagdishpurHaldia and until the government agreed to give 40 per cent of the project cost as grant from the budget. The pipeline takes the gas to Prime Narendra Modi's constituency,

Plans to split the company had been discussed more than a decade back too but it did not materialise.

Sources said refiners Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) have evinced in acquiring GAIL to expand their business. One of the two companies could be sold the marketing business while GAIL asked to concentrate on just laying pipelines.

GAIL also owns a petrochemical plant at in Uttar Pradesh which too could be sold along with the marketing business to either IOC or BPCL.

The company had in the past resisted the split on grounds that its and transmission businesses operate at arms length, and hence do not need to be separated.

GAIL's marketing business formed 71 per cent of its 2016 -17 total sales, and 25 per cent pre-tax profit.

The government has a 54.89 per cent stake in Its current market cap is Rs 84,607.44 crore.

"Is it not fair to expect to be laid to ," Pradhan asked.

in Odisha, and would produce good when they get gas, he said. "High quality in India is very less currently.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, January 09 2018. 19:50 IST