Govt mulls spinning off GAIL’s gas transmission biz

The Centre is considering a plan to spin off the gas transmission business of GAIL India Ltd., the nation’s largest gas utility, into a separate unit, according to people with knowledge of the matter.

The oil ministry is seeking approval from the cabinet for splitting the transmission business from the gas marketing operations, the people said, asking not to be identified as the matter is not public. GAIL has appointed an international consultant to determine tax implications after the restructuring, they said. Oil ministry spokesman declined to comment, while a GAIL spokeswoman didn’t respond to email seeking comment.

The plan to carve the pipelines business into a fully-owned unit will bring greater transparency between the two businesses and may allow the government to sell shares at a later date. GAIL owns two-third of Indias operating gas transmission network, and the pipelines operation accounts for close to 40% of its earnings.