Gail India subsidiary GAIL Gas Ltd (GGL) will raise Rs300 crore debt from banks and financial institutions to fund its CNG corridor and city gas distribution projects as also other future initiatives.
Registered as a limited company last week, with an initial capital base of Rs200 crore, GGL is expected to draw up business plans and present to the Gail board within three months.
Gail Gas will work as a holding company for implementing city gas distribution projects through branch/unit offices.
The company will take up distribution and marketing of CNG as fuel for vehicles (inter-city as well as intra city), piped natural gas for domestic/commercial/industrial purposes and auto LPG as fuel for transport vehicles in the various cities, both within and outside the country.
The company will also invest in infrastructure in various cities and along the national highways for building CNG corridors, which includes natural gas compressor stations, laying of pipelines from city gate stations to the consumption areas and associated facilities, setting up of distribution points / retail outlets for CNG/Auto LPG and transport gas through mobile cascades/lorries.
The CNG corridor project for setting up CNG stations along the national highways will involve an estimated capital outlay of Rs35 crore.
GAIL has identified 230 cities for gas distribution in phased manner.
GAIL Gas Ltd today applied to the Petroleum and Natural Gas Regulatory Board (PNGRB) for a licence to set up CNG stations and piped gas network in six cities, including Gwalior, Mathura and Ghaziabad.
GAIL Gas plans to start retailing 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) among 17 cities in the first phase.