Press Releases
[New Delhi, 17th May, 2007] Hindi version
GAIL-HPCL sign JV agreement for city gas projects in Rajasthan
New Delhi, June 26, 2007: GAIL (India) Limited and Hindustan Petroleum Corporation Limited (HPCL) today signed a Joint Venture agreement for City Gas Distribution projects in Rajasthan. The agreement was signed at GAIL office by Shri A K Purwaha, Director (Business Development), GAIL and Shri S Roy Choudhury, Director (Marketing), HPCL in the presence of Dr. U D Choubey, CMD, GAIL and Shri Arun Balakrishnan, CMD, HPCL and senior executives of both organizations.
The Joint Venture Company will take up City Gas Distribution projects in Rajasthan and enable use of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) in cities of Rajasthan for automotive and domestic use. The Joint Venture Company will start its operations in Kota for which the Detailed Feasibility Report (DFR) has already been prepared by GAIL. GAIL’s Vijaipur – Kota pipeline is already operational and the Kota city gas project will source its gas though this pipeline.
Speaking on the occasion, Dr. U D Choubey, CMD, GAIL expressed great pleasure in having HPCL as a JV partner. City Gas Distribution, he said, will be the next high growth areas in gas markets in future and the next decade will be the decade of City Gas Distribution. Dr. Choubey recalled the success story of Bhagyanagar Gas Limited, the GAIL-HPCL JV in Andhra Pradesh, and hoped that the JV Company for Rajasthan would blaze a similar trail of success. Emphasizing that city gas distribution is going to be very competitive business, he called upon the officials of the two companies to move fast and expedite the further implementation of the city gas project in Rajasthan to ensure that the Joint Venture fully exploits the first mover advantage.
Shri Arun Balakrishnan, CMD, HPCL said that GAIL and HPCL already have experience of working together in Joint Ventures and this Agreement will provide another opportunity for the two companies to work together in the City Gas Distribution business. He reiterated the importance of creating necessary infrastructure to enable the joint venture to exploit the first mover advantage. Both companies, he said, had enough talent and resources which could be suitable pooled in to ensure that the Joint Venture was capable to put all necessary physical and organizational infrastructure in place.
The new Joint Venture will have 22.5 percent equity holding each by GAIL and HPCL, five percent by the State Government or its nominee and 50 percent by strategic Investors / public / financial institutions.
This will be the third Joint Venture of GAIL and HPCL and the ninth Joint Venture of GAIL for city gas distribution projects in India. The two companies have set up Bhagyanagar Gas Limited and Avantika Gas Limited for city gas distribution projects in Andhra Pradesh and Madhya Pradesh respectively.
GAIL has already formed eight Joint Venture companies in Delhi, Mumbai, Andhra Pradesh, Tripura, Kanpur, Lucknow, Agra, Pune and Madhya Pradesh and has identified 28 more cities for city gas distribution. GAIL has also signed MoUs with OMCs for Kerala, Karnataka and West Bengal. On the global front, GAIL has established its CNG and City Gas presence in Egypt through equity participation in Fayum Gas, Shell CNG and Natgas, Egypt. It has also acquired stake in China Gas Holdings for CNG opportunities in mainland China.
Shri A K Purwaha, Director (Business Development), GAIL and Shri S Roy Choudhury, Director (Marketing), HPCL exchange documents after signing of the Joint Venture Agreement between the two companies for City Gas Distribution projects in Rajasthan in the presence of Dr. U D Choubey, CMD, GAIL and Shri Arun Balakrishnan, CMD, HPCL