The Hindu Business Line : GAIL, BPCL to sign pact soon for LNG marketing jt venture

BHARAT Petroleum Corporation Ltd and GAIL (India) would soon sign an MoU for setting up a joint venture company for the marketing of LNG for automobiles and piped gas to domestic users in Kerala and Karnataka.

The signing of the MoU, which was to take place on Nov 28, has been postponed and a date would be announced soon, Capt M.J. Mohan, General Manger, BPCL, who heads the Gas Task Force (GTF), told Business Line.He said that after signing the MoU, tripartite agreements would be signed between the two public sector companies and the Kerala State Industrial Development Corporation (KSIDC) and its counterparts in Karnataka later.

The joint venture company would take up supply of CNG in both the States.

The company to be christened as " Gods Own Gas Company Ltd" would supply CNG initially in the city to automobiles, domestic, commercial and small industrial sector and later it would be extended to other cities and towns,

The total project cost is estimated at Rs 300 crore. The equity structure of the joint venture company, to be constituted on similar lines of Indraprastha Gas Ltd, New Delhi, would be GAIL 22.5 per cent, BPCL 22.5 per cent, the Kerala Government 5 per cent and the balance would be held by strategic investors, public and financial institutions. The capital base of the joint venture would be finalised next month, he said.

The required infrastructure for supplying the CNG would be in place by the time the proposed LNG terminal of the Petronet LNG Ltd (PLL) is commissioned in late 2009, he said. The terminal, which was initially envisaged to have an annual capacity of 2.5 million tonnes, would now be of 5 million tonnes.

He said that the most benign low carbon eco-friendly fuel was a versatile resource and catalyst for socio-economic growth of the State. The Gas use spectrum in Kerala includes power, fertilizer and other industries besides agriculture such as horticulture, poultry, marine and dairy.

The other beneficiaries would be residential, commercial, transport and government establishments, he said.

The potential demand for gas from the residential and auto sectors would be comparatively high given the high density of population here, he added.

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