GAIL, HPCL sign deal for gas supply in India's Andhra Pradesh

Feb. 26, 2002
Gas Authority of India Ltd. (GAIL) and Hindustan Petroleum Corp Ltd. (HPCL) signed a memorandum of understanding to establish a joint venture company -- tentatively called Bhagyanagar Gas Ltd. (BGL) -- for the distribution of natural gas, LPG, and other gas liquids in Andhra Pradesh state, India.

By an OGJ Online Correspondent
MUMBAI, Feb. 26 -- Gas Authority of India Ltd. (GAIL) and Hindustan Petroleum Corp Ltd. (HPCL) signed a memorandum of understanding to establish a joint venture company -- tentatively called Bhagyanagar Gas Ltd. (BGL) -- for the distribution of natural gas, LPG, and other gas liquids in Andhra Pradesh state, India.

BGL is expected to have an equity base of 1 billion rupees ($20.5 million). The project envisages an investment of 7-10 billion rupees over the next 7 years.

Under the MOU, GAIL and HPCL will each hold 22.5% of the JV equity, with the government of Andhra Pradesh state having the option to acquire a 5% equity stake. The remaining 50% would be offered to financial institutions, both domestic and foreign.

"The joint venture will distribute gas to the residential, commercial, and automotive sectors," said GAIL Chairman Proshanto Banerjee. "It will pursue the development of infrastructure and lay, operate, and maintain its own pipeline."