The Hindu Business Line : GAIL, IOC firm up ties for city gas projects

New Delhi, July 18 GAIL (India) Ltd and Indian Oil Corporation Ltd have firmed up their ties for a second joint venture for city gas distribution (CGD) project.

According to sources, although an umbrella agreement between the two entities was inked earlier this year for floating their second joint venture for city gas distribution projects in West Bengal, a formal commitment was reached today.

During the inking of the agreement, GAIL had said that 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 first joint venture, Green Gas Ltd (GGL), is already operational in Lucknow and Agra, and is planning to expand to other cities of western Uttar Pradesh. The scope of the joint venture includes distribution and marketing of compressed natural gas for vehicles, and piped natural gas for domestic, commercial and industrial purposes. The company will also take up supply of auto LPG as fuel for transport vehicles through greenfield auto LPG dispensing stations.

Sources told Business Line, 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 fro m GAIL and Indian Oil in the ratio of 50 per cent each. The joint venture company shall source its requirement of LPG from Indian Oil or its affiliates.

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

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