Minister Rambukwella said after the state take-over the government will ensure that gas will be sold at a "reasonable price.
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Sri Lanka's state-run Ceylon Petroleum Corporation, Ceylon Electricity Board and even the Indian-owned Lanka Indian Oil Corporation are running losses due to state price controls.
"It is certainly a welcome announcement because it will be a large IPO and can be an ideal conduit for the surplus liquidity in the system," Murtaza Jafferjee head of JB Securities.
"What I would like to find out is whether there is a transparent LPG pricing formula so that the gas company does to have to face the same uncertainty that LIOC has to face and the company will be run by professional management".
"Investors pay a premium for quality management.
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It was not yet clear whether a technical partner will be brought to manage the firm, though the second gas distributor in the country, Laugfs, has had talks with the government about the possibility of managing the firm.