Gail Gas to raise Rs300 crore debt for city distribution business

03 June 2008

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.