The Hindu Business Line : IOC may partner Reliance for city gas distribution

Mumbai April 11 Indian Oil Corporation Ltd (IOC) is in talks with Reliance Industries Ltd to source natural gas for distribution in cities. The gas would be sourced from the upcoming KG basin fields of Reliance. IOC could even consider entering into a joint venture with Reliance for the gas distribution venture, said Mr G.C. Daga, IOC's Director-Marketing.

Gas from the KG basin would be available by July 2008, Mr Daga said, addressing the media on Tuesday. The matter was still at a discussion stage. "We would like to get as much gas as possible, we are looking at all cities where gas is not currently available for city distribution. There is a potential of supplying to 200 cities, he said.

Mr A.M.K. Sinha, IOC's Executive Director (Retail Sales), said that by July 2008 about 40 million standard cubic metres per day (mscmd) of gas would be available from Reliance. A large part of this gas would be supplied to power plants, therefore, about 7-8 mscmd would be left for city gas distribution. IOC would like to have the whole supply, Mr Sinha said.

Rural market

IOC is now fanning out into low-cost, no-frills fuel stations, largely for the rural population. These stations, called Kisan Seva Kendras (KSK), are at present in 1,330 locations across the country. Mr Daga said that at present IOC has over 12,954 retail outlets, of which about 1,330 are KSKs. For the year 2007-08, IOC proposes to commission 1,600 new retail outlets, of which 1,000 would be KSKs. With this, IOC will further strengthen its presence in the rural market, which has an untapped potential, he said.

LPG import facility

IOC is considering setting up a six-lakh-tonne LPG import facility near Ennore, Chennai. About Rs 300 crore would be the investment for the facility. The issue would soon be taken to the IOC board for the approval of the facility, Mr Daga said.

Further, in the 2007-08 period, IOC proposes to invest Rs 1,800 crore, of which Rs 624 crore would be spent on the retail business, Rs 629 crore would be for three LPG bottling plants, Rs 180 crore would be for augmenting tanks and infrastructure and about Rs 300 crore would be spent on pipelines, he said.