Govt may own 51% stake in proposed operator of gas pipeline capacity

By ET News

The government will own a 51 per cent equity stake in the planned transport system operator (TSO) that will manage the common carrier capacity of all natural gas pipelines in the country, according to people aware of an oil ministry proposal.

The balance 49 per cent stake will be split equally between five petroleum sector state-run enterprises: ONGC, Indian Oil, Gail, Hindustan Petroleum Corp, and Engineers India, according to the ministry’s proposal that needs Cabinet nod.

Finance minister Nirmala Sitharaman had announced a plan for an independent TSO in the last budget to facilitate the booking of all common carrier capacity in natural gas pipelines on a non-discriminatory open-access basis.

The government had earlier evaluated the idea of vertically splitting Gail, the country’s largest gas marketer and pipeline operator, to meet the industry’s long-standing demand of separating content and carriage.

The government dropped the idea after fierce opposition by Gail and opted for a TSO.

A well-functioning TSO is expected to bring a level playing field to all natural gas marketers and end advantages the industry perceives Gail to have due to its overwhelming control of the country’s gas pipelines.

ET News
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