GAIL, IndianOil firm up ties for city gas projects
New Delhi   19-Jul-2007
GAIL (India) Ltd and IndianOil 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 IndianOil, 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 Luck-now 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 takeup 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 from GAIL and IndianOil in the ratio of 50 per cent each. The joint venture company shall source its requirement of LPG from IndianOil or its affiliates.