New Delhi: GAIL (India) Ltd will establish a separate subsidiary for its city gas distribution (CGD) and compressed natural gas (CNG) corridor business. It said that the yet to be named company will have an initial equity of Rs 200 crore and corresponding to this amount debt shall be arranged amounting to Rs 300 crore (considering 1.5:1 debt:equity ratio). The establishing of the subsidiary will also help in part for compliance of requirement of unbundling of the business for GAIL, which may come in future. To start with, 17 cities have been selected for such projects entailing an initial investment of Rs 500 crore by 2012. The subsidiary company will engage in distribution and marketing of CNG as fuel for vehicles (inter-city as well as intra-city), piped natural gas for domestic/commercial/ industrial purposes and auto LPG as fuel for transport vehicles in various cities in India and abroad.
The new subsidiary will also form partnership with gas producers/strategic partners for implementation of the city gas projects as per the strategic decisions taken by GAIL. The subsidiary company will also take up investment in and establishing of infrastructure in various cities and along the national highways for building CNG corridors which includes, among others, natural gas compressor stations, laying of the pipelines from city gate station(s) to the consumption areas and associated facilities, setting up of distribution points/retail outlets for CNG/auto LPG and transport gas through mobile cascades/lorries.
The new subsidiary will also form partnership with gas producers/strategic partners for implementation of the city gas projects as per the strategic decisions taken by GAIL. The subsidiary company will also take up investment in and establishing of infrastructure in various cities and along the national highways for building CNG corridors which includes, among others, natural gas compressor stations, laying of the pipelines from city gate station(s) to the consumption areas and associated facilities, setting up of distribution points/retail outlets for CNG/auto LPG and transport gas through mobile cascades/lorries.
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