Gail, Andhra JV to set up gas grid

Gail (India) Ltd is planning to extend its support to the Andhra Pradesh government for setting up a regional gas grid in the state. The Navratna public sector unit has initiated talks in this regard and will most likely set up a joint venture (JV) in the state for the purpose.

Addressing the media, Proshanto Banerjee, chairman and managing director of Gail, said, "There has been a proposal regarding our participation in the regional gas grid. We have offered our technical support to the state government in this regard and may follow it up with an MoU and a JV."

Banerjee, however, said that it was too early to comment on how much equity stake they would take in the venture.

"We are also looking at a new technology wherein natural gas that is imported in the form of LNG is regassified in the ship itself. We have taken up a pilot project at Krishnapatnam port and are undertaking a feasibility study."

"We have set up a JV in Andhra called Bhagyanagar Gas Ltd. By April 2006, we aim to provide piped natural gas to 1,000 homes in the state. The first town to get this benefit will be Vijayawada," he said.

C N Trivedi, MD, Bhagyanagar Gas, said, "We will be investing Rs 200 crore between 2006 and 2008 for CNG and city gas distribution in Hyderabad. We have already invested Rs 22 crore in Vijayawada for similar purpose."

Banerjee said he foresees the state becoming analogous to Henry Hub in the US in the next couple of years. Henry Hub is a natural gas pipeline hub in Louisiana that besides serving as the delivery point for natural gas futures contracts, acts as a benchmark for wholesale natural gas prices across the US.

Gail is also pursuing business opportunities in Turkey and Iran for urban gas distribution besides a gas-based petrochemical project in Iran. "We are looking at a cross-border gas pipeline from Iran via Turkey to Austria," he said.

Banerjee was here to inaugurate the Air Pollution Research and Disease Diagnostic Centre at the MNJ Institute of Oncology. Gail has sponsored Rs 20 lakh for the centre. Similar centres are being planned in Rajahmundry and Vijayawada.

B N Rao, director of MNJ Institute of Oncology, requested for Gail's support in setting up a full-fledged molecular oncology department at an investment of Rs 1.25 crore. Banerjee said that they would consider it favourably.