Gail, IOC in JV for gas distribution in Bengal

New Delhi, Apr 12: Gail India today said it has entered into a joint venture agreement with Indian Oil Corporation for city gas distribution projects in West Bengal.

The new company will have 22.5 per cent equity holding each by Gail and IndianOil, five per cent by the West Bengal government and a major 50 per cent by strategic investors or financial institutions.

The scope of work includes distribution and marketing of CNG for vehicles, and Piped Natural Gas for domestic, commercial and industrial purposes.

The company will also take up supply of auto LPG as fuel for transport vehicles through greenfield auto LPG dispensing stations.

''We must also proactively move to other parts of India, where GAIL and IndianOil may work together,'' IndianOil Chairman and Managing Director U D Choubey said.

One of the high growth areas in gas markets in the future, particularly in the next decade, would be the city gas distribution area, he added.

The JV will source its requirement of Natural Gas from Gail for the quantity allocated by the Ministry of Petroleum and Natural Gas.

Additional gas over allocation will be tapped from the company and IndianOil in equal ratios. The JV will source its requirement of LPG from IndianOil or its affiliates.

This will be the second joint venture between both the companies for city gas distribution projects. The first JV -- Green Gas Ltd (GGL), is already operational in Lucknow and Agra, and is planning to expand to other cities of western UP.

UNI