Gail, IOC in JV for city gas project
The respective boards are likely to approve the proposed venture by the end of this month.Updated: Feb 08, 2006 18:09 IST
State-owned GAIL India Ltd (rpt GAIL India Ltd) and Indian Oil Corporation are planning to forge a joint venture for a proposed CNG and city gas supply project in Kolkata.
"GAIL and IOC are planning to form a joint venture to source coalbed methane from Asansol or Jharia region and supply CNG for the transport sector and cooking gas for city households," GAIL Director (marketing) UD Choubey said on Wednesday.
The respective boards are likely to approve the proposed venture by the end of this month following which the agreement would be signed for the Rs 300 crore project, he said.
As per the model chalked out, GAIL and IOC each would hold 22.5 per cent stake in the venture while West Bengal government would have five per cent and the remaining 50 per cent would be offered to FIs and private players.
The total equity size would be Rs 300 crore, he said, adding that the companies had already started holding talks with FIs like IDBI, IL&FS and ADB for equity participation.
Choubey said the CBM, expected to be available in adequate quantity from Asansol or Jharia by the end of this year, would be brought by a over 200-km long pipeline to be constructred by GAIL.
The cost of construction of the pipeline could be about Rs 700-800 crore and would be borne by GAIL alone.
"CBM is basically natural gas and can be compressed into CNG. The exploration work is being done at Jharia by ONGC and at Asansol by the Great Eastern Energy Corporation. We hope to get gas availability by the end of this year or early next year," he said.
First Published: Feb 08, 2006 18:05 IST