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Karnataka Natural Gas Ltd set up to distribute piped gas in state

Mahesh Kulkarni  |  Chennai/ Bangalore 

New JV waiting for to float tenders for city gas distribution project

and (KSIIDC) have formed a joint venture company to set up city gas distribution (CGD) network for Bangalore households and fuel for CNG-run vehicles.

The new JV, ‘Karnataka Natural Gas Limited’ (KNGL), apart from Bangalore, may also develop CGD networks in major cities and towns in the districts along which the Dabhol-Bangalore gas pipeline alignment passes, a top government official said.

“We recently formed the KNGL to take forward the CGD project for Bangalore with an authorised share capital of Rs 100 crore. KSIIDC has taken 24 per cent stake, while GAIL has taken 26 per cent. The balance will be offloaded to institutional and strategic investors at a later stage,” Rajkumar Khatri, secretary, infrastructure development department told Business Standard.

Presently, KNGL is preparing the business plan to take the project ahead. However, the company cannot take up the CGD work immediately as it has to secure the licence through an open bidding process. The Petroleum and Natural Gas Regulatory Board (PNGRB), which has the mandate to select the bidder, is yet to float tenders for selecting the bidder to implement the CGD project.

“We are waiting for to float tenders so that we can participate in the process. Only after bidding and winning the bid we can go ahead and execute the projects. The whole process is depending on the regulator. In fact, we asked the government to give us the mandate to execute the project. But they have chosen to go through the tendering mechanism,” GAIL sources said.

Meanwhile, is likely to complete the trunk gas pipeline laying work between Dabhol in Maharashtra to Bidadi near Bangalore by July-end and would be commissioned by September, 2012. The company has so far invested around Rs 3,000 crore on the 900-km gas pipeline project of the cost of Rs 5,000 crore. The pipeline will carry about 12 million metric standard cubic metres of gas per day once completed.

The Dabhol-Bangalore Gas pipeline project includes spur lines to Gokak, Ratnagiri, Kolhapur, Sangli, Bijapur, Dharwad, Davangere, Harihar and Tumkur.

However, the company will be ready to supply gas to industrial users by September this year. GAIL has already entered into supply agreements with several industrial users. like the Toyota Kirloskar Motor and ITPL are in the process of setting up gas-based captive power plants. Toyota also plans to use the gas for their paint shop in Bidadi car plant, GAIL sources said.

State-owned Karnataka Power Corporation Limited is also setting up a 700 Mw gas-based power project at Bidadi.

The gas will also be available for commercial vehicles like city buses and three-wheelers in the city.

“Our focus is on setting up the natural gas infrastructure in industrial estates, city gas distribution (CGD) networks and gas distribution infrastructure downstream of trunk lines in the state of Karnataka,” KSIIDC sources said.

In addition to this pipeline, the state is also getting another gas pipeline between Kochi and Bangalore via Mangalore, which is likely to be commissioned by middle of 2013.

First Published: Fri, May 18 2012. 00:34 IST