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| GAIL, MIDC form JV to lay gas infrastructure in Maharashtra |
| Sanjay Jog / Mumbai Mar 29, 2010, 00:57 IST |
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GAIL India and Maharashtra Industrial Development Corporation (MIDC) have entered into a joint venture to lay natural gas infrastructure within the latter’s industrial estates across the entire state. And, with authorisation from the national regulator, PNGRB, develop natural gas distribution infrastructure elsewhere, too.
The proposed distribution network is expected to benefit the proposed gas-based power projects of 10,000-Mw capacity in the state.
Rajendra Darda, Maharashtra’s minister of industries told Business Standard: “The JV will develop natural gas highways/spur lines for transmission and distribution of gas in the state from the main line of GAIL/other companies, to the gas consumption centres. The initial authorised share capital of the JV company will be Rs 100 crore. The authorised capital would be increased to meet requirements for further investments, as and when they arise.”
He informed that the initial issued, subscribed and paid-up capital of the JVC would be Rs 5 lakh, consisting of 50,000 equity shares of Rs 10 each. GAIL and MIDC would hold 25 per cent equity each in the JV and the balance half would be offered to strategic investors or non-government companies or financial institutions. No single investor from strategic partners or financial institutions would be allowed to hold more than 20 per cent of the JVC’s equity.
The JVC would not be a government company as envisaged under Section 617 of the Companies Act, nor a company to which the provisions of Section 619B of the Companies Act applies. The JVC would source its requirements of natural gas from GAIL India or its affiliates by entering into a Gas Purchase Agreement . The sourcing of the product would be done at the most competitive/best offered price and the transactions carried out on ‘arms length’ principles. If GAIL or its affiliates are not in a position to supply the gas requirements of the JVC, the latter would give the next preference to other parties. The JVC may also source natural gas/CNG by importing these.
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