A total of Rs.17k crore are expected to be raised by Indian oil, GAIL and Hindustan Petroleum by selling stakes in their pipelines in the next financial year.
State-owned Indian Oil Corporation is likely to sell stakes in one or two of its vast networks of crude oil and petroleum product pipelines in the country under the asset-monetization plan.
It is expected to raise Rs.8000 crore by its pipeline monetization. Its Director (Finance) Sandeep Kumar Gupta has maintained that Indian Oil will not give up full control on the pipeline. He stated on the conference call that “InvIT could be one model which we may look at but we won’t sell 100 per cent. We will remain the operator,” .
Similarly, GAIL and HPCL are targeted to generate Rs. 45,000 crore each, as part of pipeline monetization program to be initiated by the government.
Reportedly, HPCL’s LPG pipeline in Karnataka and GAIL’s two pipelines crossing Maharashtra, Gujarat and Karnataka have been identified to be monetized.
Finance Minister Nirmala Sitharaman in her Budget for fiscal year 2021, had announced monetization of oil and gas pipeline assets of IOC, gas utility GAIL (India) Ltd and Hindustan Petroleum Corporation Ltd. Sitharaman had stated, “national monetization pipeline for potential brownfield infrastructure assets will be launched.”
It is quite clearly known that Indian Oil Corporation’s pipeline assets offer huge potential for unlocking value for investors and a lot of investors are looking forward to investing in such assets.
It has been projected that the proceeds of such monetization would initially go towards boosting capital spending of projects such as one for producing hydrogen fuel, renewable energy ones or petrochemical plants.
The nation’s top gas marketing and transportation firm plans to monetize the Dahej-Uran-Panvel-Dabhol pipeline and Dabhol-Bengaluru pipeline by setting up an Infrastructure Investment Trust (InvIT).
Reportedly, GAIL owns and operates huge amounts of gas pipelines throughout the country. It has a natural gas pipeline network that spans 12,502 kilometers, mostly in the western, southern, and northern parts of the country. It is currently building more pipelines in the eastern part of the country.
GAIL also plans to retain a majority stake in the pipelines that run from Dahej in Gujarat to Dabhol in Maharashtra and from there to Bengaluru in Karnataka.