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Wednesday, Nov 19, 2003

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BPCL in talks with Reliance for gas retailing

Archana Chaudhary

Mumbai , Nov. 18

THE success of compressed natural gas (CNG) in Mumbai and Delhi has led Bharat Petroleum Corporation Ltd to intensify its focus on gas retailing.

The company, which has been supplying CNG in Delhi through its joint venture with GAIL (India) Ltd, Indraprastha Gas, it is now talking to Reliance Industries Ltd for possible gas supply to Bangalore and Hyderabad.

It hopes to sign a memorandum of understanding with Reliance for supplying gas from the latter's Krishna-Godavari-basin gas find. The two companies are looking at the possibility of using Reliance's planned pipeline network to bring gas from the East coast to the two cities, Mr S. Radhakrishnan, Director (Marketing), told Business Line.

Talks are at a preliminary stage and the quantities of gas supplies have not yet been discussed, Mr Radhakrishnan said.

The company hopes to make inroads into the gas supply market especially since natural gas, considered to be a cheaper and environment-friendly fuel, is expected to affect petrol and diesel sales in the 11 other markets all over India, where the Supreme Court has mandated that public transport (buses, three-wheelers and cabs) switch over to gas.

BPCL has approached the Government for a go-ahead to develop piped gas distribution in the Pune and Kanpur markets, and may partner GAIL (India) in developing both.

It is already present in Delhi through Indraprastha Gas, a joint venture with GAIL (India), in which both the companies hold 22.5 per cent. The State Government holds five per cent stake in Indraprastha. The companies may enter into a similar understanding for the Pune (including industrial areas around the city) and Kanpur markets. BPCL has also acquired permission to enter gas retailing in Mehsana and Gandhinagar in Gujarat.

BPCL is also trying to tie-up with natural gas buyers in Gujarat including fertiliser and power companies for selling liquefied natural gas to be brought in at Dahej by Petronet LNG Ltd in January 2004. BPCL holds 10 per cent stake in Petronet.

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