GAIL inks shareholders pact

GAIL Gas Limited, a wholly-owned subsidiary of GAIL (India) Limited, signed a shareholders agreement (SHA) with Andhra Pradesh Gas Infrastructure Corporation Limited (APGIC) and Andhra Pradesh Gas Distribution Corporation Limited (APGDC) on Friday for restructuring of APGDC, which will pursue city gas distribution opportunities in the state.

APGDC was incorporated earlier this year as a wholly-owned subsidiary of APGIC with an authorised share capital of Rs 100 crore for laying and maintaining natural gas pipeline infrastructure and city gas distribution (CGD) networks in the state.

Keeping in view the experience of GAIL Gas in implementing CGD projects, the state government gave the nod for equity participation of GAIL Gas in APGDC to tap the huge potential of the natural gas business so as to accelerate the industrial growth in the state.

With the signing of the SHA, GAIL Gas and APGIC will hold 25 per cent equity each in the company. The balance 50 per cent equity has been kept for strategic partners, financial institutions and other private/public participants. After the restructuring of APGDC, the chairman of the company will be from APGIC and the managing director from GAIL Gas.

According to a GAIL press release, the company plans to make use of the abundant natural gas resources available in the Krishna Godavari Basin and create the necessary CGD infrastructure to utilise these resources for the benefit of industry, transport and domestic sector in state.

The scope of business of the company includes creating natural gas infrastructure in industrial estates, areas and clusters, developing distribution infrastructure downstream of trunk lines, promoting natural gas applications in various sectors and setting up CGD networks to supply environment-friendly, economical and convenient fuel compressed natural gas (CNG) to vehicles and piped natural gas (PNG) to households, commercial establishments and industries.

APGDC plans to take up city gas distribution activities throughout the state by participating in the bidding process of Petroleum and Natural Gas Regulatory Board (PNGRB), including for Rangareddy-Medak, Nalgonda and Khammam districts for which bids have been invited in the fourth round.

GAIL (India) Limited at present has pipeline networks in Rajahmundry and Kovvuru areas in the state. It proposes to develop other pipeline networks in Andhra Pradesh in the future.