GAIL India announced today the board of directors approved to set up a subsidiary company for city gas distribution (CGD) and CNG corridor business with an initial investment of Rs 5 billion. The company will be investing Rs 2 billion and the balance will be raised through debt. The formalities for registering the company and commencement of business have also been initiated.
Announcing the development, UD Choubey, CMD, said that the next decade belongs to city gas distribution and it is being taken up as a major focus area by GAIL. The setting up of the subsidiary will also help in part for compliance of requirement of unbundling of the business for GAIL which may come in future, he added.
The subsidiary company will take up distribution and marketing of CNG as fuel for vehicles inter city as well as intra city, piped natural gas for domestic, commercial, and industrial purposes and auto LPG as fuel for transport vehicles in the various cities of India and abroad.
The subsidiary company will also take up investment in and setting up of infrastructure, in the various cities of India and along the national highways for building CNG corridors which includes, among others, natural gas compressor stations, laying of the pipelines from city gate stations to the consumption areas and associated facilities, setting up of distribution points and retail outlets for CNG and auto LPG and transport gas through mobile cascades and lorries. The new subsidiary will also carry out allied retail business activities at CNG and auto LPG retail outlets within the cities and along the highways. The subsidiary will also form alliances with gas producers and strategic partners for implementation of the city gas projects as per the strategic decisions taken by GAIL.
The existing joint venture companies would continue to operate as at present. However, GAIL will have the option to transfer its shares in the existing city gas distribution joint venture companies as also the assets in
The new subsidiary will also take up the CNG corridor project which involves an estimated capital outlay of Rs 350 million for setting up CNG stations along the highways. GAIL has identified 230 cities contiguous to existing and proposed pipelines for City Gas Distribution in phased manner. In first phase, seventeen cities have been identified to be taken up through its subsidiary Company with authorization from Petroleum and Natural Gas Regulatory Board (PNGRB). The subsidiary Company would take up directly with PNGRB towards the authorization and execution of CGD projects throughout
The subsidiary will have the distinct advantage of access to GAIL`s existing network of over 6,700 km and proposed network of around 5,500 km across the country. This will help in spreading the economic and environmental benefits of clean fuel like natural gas to distant parts of the country and help in achieving the objective of inclusive growth.
Shares of the company declined Rs 2.9, or 0.74%, to settle at Rs 391. The total volume of shares traded was 356 at the BSE (Tuesday )
No comments:
Post a Comment