RIL may acquire Adanis city gas network in Guj

Written by Sumantra Das | Mumbai, Jul 30 | Updated: Jul 31 2007, 05:06am hrs
After acquiring the retail venture of the Adani Group, Reliance Industries Limited (RIL) is now likely to acquire Adanis Rs 331 crore gas supply network linking three towns in western India. According to sources close to the development, after signing an MoU with Gujarat State Petronet Ltd (GSPL) two months back to supply gas to the company, RIL is looking to expand its gas business throughout Gujarat.

Sources also said that RIL is keen to be in city gas projects in 13 cities in the country, including Gujarat. According to PMS Prasad, president, petroleum business, RIL, We have got the nod from the Gujarat government to go ahead with the city gas distribution project. However, we need the Centres permission to finalise the project in Gujarat. When contacted, an Adani group official declined to comment on the development.

The Adani group has already completed the infrastructure for regassified liquefied natural gas (LNG) through underground pipelines to domestic households and commercial and industrial users in cities such as Baroda, Ahmedabad and Mehsana in Gujarat. However, the full-fledged service is yet to take off. According to a senior official of Adani group, due to the scarce supply and limited availability of pipeline infrastructure, gas distribution networks in Gujarat have been confined to cities in south Gujarat region. However, we are looking to spread into other parts of the state with a potential joint venture partner.

In the year 2004-05, Adani group inked a preliminary agreement with state-run Indian Oil to buy 1.3 million standard cubic metre per day of regassified LNG from the first quarter of 2004 which would be raised to 2.5 million standard cubic metre per day by 2007-08. There are three piped gas distribution circles in Gujarat, with the Adani group leading the fray with Vadodara and Ahmedabad. BPCL is the second company to take gas to households and industrial houses, while GAIL is the third.

However, that would take some time, as the distribution zone allotted to GAIL is Surendra Nagar and Rajkot, where the gas transmission pipelines of GSPL will reach only in the next couple of years.