British Gas To Sell Local Arms Lpg Wing

British Gas is talking to global oil majors like Exxon, Royal Dutch Shell and SHV Energy for selling the LPG business in its domestic subsidiary Gujarat Gas Company Ltd.

The UK company has also offered its equity in the Petroleum Infrastructure Ltd (PIL) as part of hiving off its non-related business.

British Gas which holds 60.1 per cent equity in Gujarat Gas after its recent takeover of the company is working on techno-commercial deal to sell both these businesses which do not fit in with its existing international line of business.

Sources say that the formal discussions with these companies will commence only after the board approval on February 26.

 

The Gujarat Gas board is meeting on that day.

The UK-based gas company has been considering joining hands for technology as it has no expertise in the LPG business worldwide.

However, since the company has now received extra gas allocation from the state-owned Gujarat State Petrochem-icals Corporation Ltd (GSPCL), it now plans to hive off the division in toto, industry sources claim.

Gujarat Gas has two LPG bottling units at Sanand in Ahmedabad and at Rajkot, each with a capacity of 12,000 tonne per annum. With a marketing network spread in Gujarat, the company caters to 25,000 customers in the state.

Before the takeover by British Gas, Gujarat Gas promoted by the Arvind Mafatlal group had plans to expand its bottling facilities through the franchise route. It had also drawn out plans to enter parallel LPG marketing in Madhya Pradesh and Maharashtra.

However, the company went slow on the expansion plan following huge price differential in the domestic LPG bet- ween the private and public sector oil companies.

Industry sources claim that the British Gas also plans to sell off Gujarat Gas stake in Petroleum Infrastructure Ltd. Gujarat Gas, in 1995, entered into 50:50 joint venture with Bharat Petroleum Corporation Ltd (BPCL) to develop infrastructure facilities at Okha port.

This port has the capacity to handle one lakh tonne of LPG per annum and other petroleum products.

This joint venture also planned a Rs 350 crore import terminal at Dahej in Gujarat to handle 2.5 lakh tonnes of petroleum products including 30,000 tonnes of LPG. This project was expected to commence operations sometime in 1999.