The state-owned gas utility GAIL (India) is planning to launch an InvIT of its two gas pipelines between Dahej and Bengaluru ahead of a proposed splitting of the pipeline business from gas marketing function. The company plans to monetise Dahej-Uran-Panvel-Dabhol pipeline and Dabhol-Bengaluru pipeline by setting up an Infrastructure Investment Trust (InvIT). InvITs are like a mutual fund, which enables direct investment of small amounts of money from possible individual/institutional investors in infrastructure to earn a small portion of the income as return. GAIL will retain majority stake in the pipelines that run from Dahej in Gujarat to Dabhol in Maharashtra and from there to Bengaluru in Karnataka. The InvIT may involve selling 10-20 per cent stake initially.
GAIL (India) owns and operates a natural gas pipeline network that spans 12,502 km, mostly in western, southern and northern part of the country. It is building more pipelines in eastern part of the country. The two pipelines proposed for InvIT had incurred over Rs 3,000 crore spending. 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. GAIL’s core business after the bifurcation will be marketing natural gas and petrochemical production. It will have to hire capacity on pipelines from the subsidiary and pay the regulator approved traffics for the same.