Indian Oil, Adani Gas To Invest Rs 9,600 Crore For CNG, PNG Supply In 10 Cities
Indian Oil and Adani Gas will set up infrastructure for retailing CNG and PNG in 10 cities they won CGD licences for.
Indian Oil Corporation Ltd. and its partner Adani Gas Ltd. will invest Rs 9,600 crore to set up infrastructure for retailing compressed natural gas and piped natural gas in 10 cities they won licences for.
Indian Oil and Adani Gas had in 2013 formed a 50:50 joint venture, IndianOil-Adani Gas Pvt. Ltd, for implementation of city gas distribution projects in various cities of India.
Over the years, Indian Oil-Adani Gas participated in various auctions for city gas licence conducted by Petroleum and Natural Gas Regulatory Board. As on date, the JV has licences for 19 geographical areas, Indian Oil said in a notice to shareholders.
City gas distribution projects, which entail retailing CNG to automobiles and marketing piped natural gas to household kitchens and industries, are typically long duration projects wherein demand build-up is gradual and revenue generation becomes appreciable only in the later years.
"Indian Oil-Adani Gas is still in process of development of CGD Projects in its authorised geographical areas," Indian Oil said.
"Currently, projects in 8 geographical areas have been commissioned (Chandigarh, Allahabad, Panipat, Daman, Udhamsingh Nagar, Ernakulam, Dharwad, Bulandshahr) and South Goa GA will be commissioned shortly. During 2018-19, Indian Oil-Adani Gas won 10 more GAs and development of CGD Project in these GAs would require capital expenditure of Rs 9,600 crore (approx.) to meet the committed bid numbers."
The funding required for capital expenditure has to be met from equity contribution or debt financing, Indian Oil said.
On Monday, Indian Oil shares fell 1.90 percent to Rs 139.10 apiece on the BSE while those of Adani Gas lost 0.44 percent to Rs 160.10. The benchmark Sensex shed 0.52 percent to end the day at 37,686.37 points.