MP to pick up 5% in Indore gas project

The MP government has decided to pick a 5 per cent stake in an Indore liquefied petroleum gas distribution project.

Avantika Gas Ltd, a joint venture of GAIL India and Hindustan Petroleum Corporation, has planned to invest Rs 100 crore in the project.

In the joint venture, GAIL and HPCL have 22.5 per cent each, and 5 per cent has been offered to the MP government.

The balance equity will be offered to financial institutions, strategic partners or the public. The companies have not made any statement in this regard.

Aavantika Gas Ltd has been incorporated to implement city gas projects for the supply of piped natural gas (PNG) to domestic, commercial and industrial consumers, and compressed natural gas (CNG) to automobile consumers in the cities of Madhya Pradesh.

After considering a proposal submitted to the State Project Clearance and Implementation Board, the state government decided to join the project as an equity partner by picking up 5 per cent, a senior government official informed Business Standard. "The project will be commence from 2007 and AGL will initially supply gas to Indore and Ujjain," said the official.

AGL has plans to commence the city gas project implementation initially in the city of Indore depending on gas availability. GAIL is providing pipeline connectivity to Indore through 135 kilometer Jagoti-Pithampur pipeline with an investment of Rs 195 crore. Gail is also laying Kailaras-Malanpur pipelines.

"The project will be expanded to other cities of Madhya Pradesh including Gwalior and Ujjain," but according to an HPCL insider, "the gas will be available on the basis of financial viability and gas availability."

Gail is also providing gas through Kailaras-Malanpur pipelines to a captive power plant in Malanpur (Gwalior) jointly promoted by Wartsila India and local industrialists. The power plant named as Malanpur Captive Power Limited (MCPPL).