Reliance Industries (RIL) has picked up a 67% stake in Krishna Godavari Gas Network Limited (KGGNL), a company floated by the Andhra Pradesh government to set up India's first state-wide gas distribution network. The shareholders' agreement should be signed next week. CNBC-TV18’s Vishwanath Pilla and Ashwin Mohan report.
RIL has picked up a 67% stake in Krishna Godavari Gas Network Limited... a company mandated to set up a state-wide gas distribution network.
The Andhra government, GSPC and IDFC are the other stakeholders, each holding 11%.
The network will use supply gas from Reliance's D6 block in the KG basin and the government says using this network will cut cooking and transportation fuel costs by 40%, and put India's city gas distribution plans on the fast track.
Says Somayajulu, Economic Adviser, Andhra Pradesh, "The Empowered Group of Ministers (EGoM), as part of first phase, has allotted 5 mmcsmd for city gas distribution. All the country put together is not utilizing 2-3 mmscmd gas. One can imagine the difficulty that would be in using 5 mmscmd gas — it depends on the infrastructure."
The state-wide network will require an investment of Rs 1 lakh crore. Only for Hyderabad, Rs 3,500 crore will be required.
The network alone is not enough. The AP government plans to meet the EGoM to push for steady supplies. It wants a firm allotment of 8.5 mmscmd of gas, as promised by RIL.
After all, this gas will also help power the 2,200 mega watt power plant in Karimnagar and help the state completely use up the 10 mmscmd gas it was allotted from the first phase of production at KG basin.
source: MC
RIL has picked up a 67% stake in Krishna Godavari Gas Network Limited... a company mandated to set up a state-wide gas distribution network.
The Andhra government, GSPC and IDFC are the other stakeholders, each holding 11%.
The network will use supply gas from Reliance's D6 block in the KG basin and the government says using this network will cut cooking and transportation fuel costs by 40%, and put India's city gas distribution plans on the fast track.
Says Somayajulu, Economic Adviser, Andhra Pradesh, "The Empowered Group of Ministers (EGoM), as part of first phase, has allotted 5 mmcsmd for city gas distribution. All the country put together is not utilizing 2-3 mmscmd gas. One can imagine the difficulty that would be in using 5 mmscmd gas — it depends on the infrastructure."
The state-wide network will require an investment of Rs 1 lakh crore. Only for Hyderabad, Rs 3,500 crore will be required.
The network alone is not enough. The AP government plans to meet the EGoM to push for steady supplies. It wants a firm allotment of 8.5 mmscmd of gas, as promised by RIL.
After all, this gas will also help power the 2,200 mega watt power plant in Karimnagar and help the state completely use up the 10 mmscmd gas it was allotted from the first phase of production at KG basin.
source: MC
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