New Delhi, Oct 17 (UNI) GAIL (India) Ltd, country's largest natural gas distributor, today said it will form a joint venture with state-owned Rashtriya Chemicals and Fertilisers (RCF) to set up a Rs 2,400 crore plant in Orissa.
The plant will have a a capacity of 2,940 tonnes of urea per annum.
''We will form a JV with Rashtriya Chemicals and Fertilisers.
An agreement between GAIL and RCF will be signed soon,'' GAIL Chairman and Managing Director U D Choubey told reporters here.
He said the equity structure is yet to be finalised. RCF will carry out a feasibility study on the integrated fertiliser and chemical plant.
The plant will be fed with seven million cubic metres a day (mcmd) of gas produced through the surface coal gasification process for which Coal India (CIL) will supply around 5,000 tonnes of coal.
''We are in constant touch with CIL. They have in-principle agreed to supply the coal,'' Mr Choubey said.
He said the company will also form another joint venture with Baroda Municipal Corporation for distributing gas to households and vehicles in Baroda in Gujarat.
''Gas has already been allocated for distribution in the city.
The investment in this joint venture could be far lesser than as a pipeline network already exists in Baroda,'' he said.
GAIL will hold 26 per cent in the Baroda joint venture which the Baroda Municipal Corporation will hold 24 per cent. While the remaining 50 per cent is likely to be held by financial institutions.
GAIL already has joint ventures which supply gas in cities such as Delhi and Mumbai.
The gas utility has reported a 27.68 per cent rise in net profit at Rs 572.54 crore for the second quarter ended September 30, 2007 compared to Rs 448.40 crore during the corresponding period a year ago.
Its total income saw a 21.55 per cent increase at Rs 4709.50 crore in FYQ208, against Rs 3874.36 crore over the same period last fiscal.