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ENERGY

Brookfield, Temesek join the race to buy Gail’s pipeline assets

Brookfield Temasek Gail

Other companies showing interest include Indian Oil Corporation (IOCL) and Bharat Petroleum

Canadian asset management company Brookfield and Singapore-based holding company Temesek have joined the race to sign Gail’s gas pipeline assets.

Besides Brookfield and Temesek, other companies that have also shown interest in Gail’s pipeline assets are Indian Oil Corporation (IOCL) and Bharat Petroleum.

State-owned Gail currently owns more than 75 percent of India’s total pipeline network which is around 12, 000 km long. The government currently holds 52.68 percent share in Gail is looking to disinvest its pipeline business.

However, the company has argued against the government’s decision to split its gas marketing and transmission businesses.  But the government is determined to divest the business and meet its target of raising around Rs 1 trillion from divestments this fiscal year.

The government recently sold its 51.11 percent stake in Hindustan Petroleum to state-run ONGC for Rs 36,915 crore.

Gail sells and transmits gas, liquefied petroleum gas (LPG), and petrochemical products. It currently dominates India’s market with a 59 percent market share. The company also has plans to add around 9000 km of pipelines. It is also India’s biggest gas marketing and trading firm.

Amid disinvestment discussions and weaker prices, shares of Gail felt to 11 years low.

Last month, the company announced that it will invest over Rs 45,000 crore over the next five years to expand the National Gas Grid and its city gas distribution network.

Brookfield is particularly keen on acquiring Gail’s pipeline assets after it bought Reliance Industries’ East-West Pipeline for Rs 13,000 crore. According to reports, Gail has held talks with several investors including Brookfield and Temasek.

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