The state-owned Karnataka State Industrial & Infrastructure Development Corporation Ltd (KSIIDC) and GAIL (India) Ltd today signed a joint venture agreement to jointly pursue various natural gas related business activities in Karnataka.
According to the JV agreement, both companies will form a joint venture company with an authorised share capital of Rs 100 crore. GAIL will hold 26 per cent equity in the company, while the KSIIDC will have 24 per cent stake. Financial institutions, investors and strategic partners will hold the balance 50 per cent equity.
KSIIDC has experience in promoting and nurturing business ventures and the mandate to pursue the stated objectives of state government while GAIL brings along expertise, know-how, and skilled manpower and its gas sourcing capabilities to the venture. The joint venture company will focus on setting up a natural gas infrastructure in industrial estates/clusters, city gas distribution (CGD) networks, distributed power generation projects in industrial areas and gas distribution infrastructure downstream of trunk lines in Karnataka. CGD networks cater to the requirement of piped gas for homes, CNG for vehicles and fuel for commercial/industrial loads within any city in Karnataka.
With the signing of the joint venture pact, both promo- ters expect that there would be a dedicated thrust to various natural gas-related business activities in Karnataka and the projects would be completed on a fast track basis to facilitate the fulfillment of the city’s gas requirement in Karnataka. GAIL is implementing the 1,413 km Dabhol-Bangalore pipeline at an investment of Rs 5,000 crore with a design capacity of 16 million metric standard cubic metres per day (MMSCMD).
GAIL is also implementing the 1,114 km Kochi- Koottanad- Mangalore-Bengalore pipeline, at an investment of Rs 3,300 crore with a design capacity of 16 MMSCMD.
Both these pipelines are likely to be completed by FY 2012-13.
Raj Kumar Khatri, Managing Director, KSIIDC and J Wason, Executive Director (Marketing), GAIL (India) Limited, signed the agreement in the presence of S V Ranganath, Chief Secretary, Government of Karnataka and other senior officers of GAIL and the state government.