For city gas projects in Gujarat, Rajasthan

Richa Mishra

New Delhi, Oct. 12

GAIL (India) Ltd and Hindustan Petroleum Corporation Ltd (HPCL) are set to float joint venture companies to implement city gas projects in Rajasthan and Gujarat for supply of piped natural gas (PNG) to domestic, commercial and industrial consumers and compressed natural gas (CNG) to automobiles.

In the joint venture, GAIL and HPCL will have equity of 22.5 per cent each and 5 per cent equity shall be offered to the respective State Governments. The balance equity would be offered to financial institutions or strategic partners or public, a senior GAIL official said.

As regards the financial investment, the official said the respective joint venture companies depending on the requirements would work it out.

The two state-owned companies have already set up joint venture companies in Andhra Pradesh and Madhya Pradesh for implementation of such projects.

About the new joint ventures, the official said that subsequent to an memorandum of understanding inked between the two entities the joint venture companies are being floated to implement the project in respective States.

In Rajasthan, the project shall be set up initially in Kota, in view of the upcoming Vijaipur-Kota-Mathania pipeline and then expanded to other cities, he told

Business Line

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In Gujarat, the identified cities include Ahmedabad, Vadodara, Rajkot and Surendranagar. GAIL is already supplying CNG in Vadodara city and HPCL is setting up infrastructure in Ahmedabad for supply of CNG, the official said adding that the company was carrying out detailed feasibility study for assessing the viability of projects in Rajkot and Surendranagar.

AP foray

The joint venture formed for promotion and marketing of environment-friendly fuels in Andhra Pradesh is Bhagyanagar Gas Ltd (BGL). The cities identified for implementation of city gas projects in that State include Hyderabad, Vijayawada and Rajahmundhary and the plan is to expand to other cities.

BGL plans to invest about Rs 10 crore during the current year for setting up additional auto LPG stations in Hyderabad and Visakhapatnam and CNG stations in Vijayawada, he added.

Aavantika in MP

Aavantika Gas Ltd (AGL) is the joint venture of GAIL and HPCL for implementation of city gas projects Madhya Pradesh. The identified cities there include Indore, Ujjain and Gwalior to begin with. AGL has plans to commence the city gas project implementation initially in Indore depending on gas availability. The Jagoti-Pithampur pipeline being laid by GAIL shall provide pipeline connectivity to the Indore city gas project, the official said.

(This article was published in the Business Line print edition dated October 13, 2006)
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