Gail India and Hindustan Petroleum Corporation (HPCL) yesterday signed a joint venture (JV) agreement for city gas distribution projects in Rajasthan. The JV will have 22.5% equity holding each by Gail and HPCL, 5% by the Rajasthan government or its nominee and 50% by strategic investors/public/financial institutions.
According to an official release issued by Gail to the BSE today, the JV will take up city gas distribution projects in Rajasthan and enable use of compressed natural gas (CNG) and piped natural gas (PNG) in cities of Rajasthan for automotive and domestic use. The JV will start its operations in Kota. Gail's Vijaipur–Kota pipeline is already operational and the Kota city gas project will source its gas though this pipeline.
Speaking on the occasion, U D Choubey, CMD, Gail said: City gas distribution will be the next high growth area in gas markets in future. It is going to be a very competitive business and the two companies need to move fast and expedite the implementation of the project to ensure that the JV fully exploits the first mover advantage.
This will be the third city gas distribution JV by the companies after Bhagyanagar Gas and Avantika Gas for projects in Andhra Pradesh and Madhya Pradesh respectively.
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