If there are no buyers, the PIL board will disperse the equity held by national firms Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL).

The other stakeholders in PIL are IBP Ltd, Essar Oil, Reliance Petroleum Ltd (RPL), ICICI Bank and the State Bank of India (SBI).

In an interview with the Financial Express newspaper, Uplenchwar said, “The company has been incurring expenditure without any income [and] it is not undertaking any future project. The board [will] meet shortly and discuss the issue [but have] mandated ICICI Securities to identify buyers for the joint venture and also do the evaluation. The advisor [will] also suggest on how to dismantle the venture if there are no buyers.”

“The buyer could pay the stakeholding companies in the ratio of their equity [and] Petronet India does not have any debt. The company today has assets worth over Rs 1,200 crore (US$266 million),” he added.

It is believed at the core for the winding up of the JV are its pipeline projects. PIL currently runs the Kochi-Karur and Mangalore-Hassan-Bangalore pipelines and was trying to establish another two projects which have had to be abandoned due to poor response.

According to Uplenchwar, “Pipelines are not viable unless the throughput volumes are large. For every 100 km of pipeline, the product volume should be one million tonne per annum to make it viable.”

“Most of the pipelines conceived by PIL are not giving good returns. Hence, the company is exploring the possibility of selling off individual pipelines or the company as a whole, he added.

IOC, HPCL and BPCL each hold 16.5% in PIL. The balance is held by the other partners.