GAIL Gas applies for gas distribution licence

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New Delhi, June 3: : GAIL Gas Ltd, the city gas distribution company of state-run GAIL India, on Tuesday applied for a licence to set up CNG stations and piped gas network in six cities, including Gwalior, Mathura and Ghaziabad.

GAIL Gas put in an application before Petroleum and Natural Gas Regulatory Board (PNGRB) for beginning retailing of CNG to automobiles and piped gas to households and industrial consumers in Gwalior, Jhansi, Mathura, Ghaziabad (all in UP), and Jhajjar and Hissar (in Haryana). "The company made the application today," a government official said.

GAIL Gas Ltd was registered last week as a limited company under the Companies Act, 1956. GAIL will chip in an initial equity of Rs 200 crore in the subsidiary, while another Rs 300 crore would be debt (considering debt-equity ratio of 1.5:1).

In the first phase, GAIL Gas has identified 17 cities for city gas projects.

GAIL had yesterday stated that the setting up of the subsidiary would help it comply with the requirement of unbundling of gas transmission and marketing business.

GAIL Gas board shall initially comprise of five directors including the managing director and will take up distribution and marketing of CNG as fuel for vehicles, piped natural gas for domestic/commercial/industrial purpose and Auto LPG as fuel for transport vehicles in various cities.

The subsidiary, GAIL press release had stated on Monday, would form alliances with gas producers/strategic partners for implementation of the city gas projects.

"The new subsidiary will also take up the CNG Corridor Project which involves an estimated capital outlay of Rs 35 crore for setting up CNG stations along the highways," it had stated.