Indian Oil Corporation (IOC) and Adani Energy Ltd are forming a new joint venture company for setting up city gas distribution (CGD) projects in various cities, including Chandigarh, Allahabad and Ghaziabad.
The joint venture company will supply compressed natural gas (CNG) as a fuel to automobiles and piped natural gas to households and industrial consumers.
The equity capital of this JV will be Rs 440 crore and the two companies will infuse Rs 220 crore each in line with their equity contribution of 50 per cent each.
Confirming the move, a senior IOC official said, “We are seeking our board approval on Monday for subscribing Rs 220 crore as our equity share in this JV company.”
The company will initially develop the CGD networks in three cities where the consortium of Indian Oil and Adani Energy has been successful.
The JV company will also take over the ongoing city gas distribution projects being developed by Adani Energy at Faridabad, Noida, Khurja. The company will also bid for future CGD projects.
IOC already has a JV company with GAIL India —Green Gas Ltd for setting up CGD projects in Lucknow and Agra. Adani Energy has secured rights from various state governments to set up city gas distribution networks at Vadodara and Ahmedabad in Gujarat and in some cities in Uttar Pradesh, Haryana and Rajasthan.
Adani Energy has completed the Faridabad city gas project in Haryana and is also developing a similar project at Khurja in Bulandshahr in Uttar Pradesh. Adani Energy’s city gas project in Noida is under review by the Supreme Court.