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New Delhi April 11 GAIL (India) Ltd and Indian Oil Corporation Ltd have entered into an understanding for formation of a joint venture for City Gas Distribution (CGD) projects in West Bengal. A memorandum of understanding was inked on Wednesday between the two state-owned companies.

This will be the second joint venture of GAIL and Indian Oil for city gas distribution projects after Green Gas Ltd, which is operating in Uttar Pradesh. The new joint venture will have 22.5 per cent equity holding each by GAIL and Indian Oil, 5 per cent by the State Government or its nominee and 50 per cent by strategic investors/public/financial institutions.

The scope of work of the joint venture includes distribution and marketing of compressed natural gas (CNG) for vehicles, and Piped Natural Gas (PNG) for domestic, commercial and industrial purposes, GAIL said in a statement here. The company will also take up supply of Auto LPG as fuel for transport vehicles through greenfield Auto LPG Dispensing Stations.

The joint venture company shall source its requirement of natural gas from GAIL for the quantity allocated by the Ministry of Petroleum and Natural Gas. Additional gas over allocation shall be sourced from GAIL and Indian Oil in the ratio of 50 per cent each. The joint venture will source its requirement of LPG from Indian Oil or its affiliates, the statement said.

"We need to make a success story out of the current effort and also work for the city gas projects abroad in Pakistan and Libya, where GAIL has shown keen interest," Dr U.D. Choubey, Chairman and Managing Director, GAIL, said at the occasion.

The MoU was inked by Mr A.K. Purwah, Director (Business Development), GAIL, and Mr B.M. Bansal, Director (Planning & Business Development), Indian Oil, in the presence of Dr U.D. Choubey, and Mr Sarthak Behuria, Chairman, Indian Oil.

More Stories on : Alliances & Joint Ventures | Petroleum | GAIL (India) Ltd

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