GAIL Gas, a wholly owned subsidiary of GAIL (India), and Kerala State Industrial Development Corporation (KSIDC) have agreed to pursue city gas distribution opportunities in the State.
The two entities signed an agreement to set up joint venture Kerala GAIL Gas Ltd in the presence of the Chief Minister, Mr Oommen Chandy, and GAIL Chairman and Managing Director, Mr B.C. Tripathi, here on Friday.
The agreement was signed by Mr M. Ravindran, Chief Executive Officer, GAIL Gas, and Mr Alkesh Kumar Sharma, Managing Director, KSIDC.
Kerala GAIL Gas will be incorporated soon and will have an initial authorised share capital of Rs 100 crore.
GAIL Gas Ltd will hold 26 per cent equity in the company and the KSIDC 24 per cent.
The balance 50 per cent equity has been kept for strategic partners, financial institutions (Indian or international) and non-Government companies.
Kerala GAIL Gas plans to take up city gas distribution activities throughout the State by participating in the bidding process of Petroleum and Natural Gas Regulatory Board.
BUSINESS PLANS
There are 14 Geographical Areas (GAs) in Kerala, each district being considered as one GA. The company intends to supply compressed natural gas to vehicles and piped natural gas to households, commercial establishments and industries.
Detailed feasibility report (DFR) and business plans for Ernakulum and Kozhikode have already been prepared to bid for these two geographical areas (GAs) for which bids are to be submitted shortly to PNGRB.
Subsequently, the company will prepare business plans for the balance 12 GAs.
Kerala GAIL Gas also plans to set up CNG stations at bus depots of Kerala State Road Transport Corporation and supply natural gas to power plants, cold storage units and wind power plants.
The company is likely to have a capex investment of Rs 250 crore by its fifth year and Rs 1,000 crore by the 25th year.