RIL, GAIL apply for city gas
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09/07/2008
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Hindu (New Delhi)
NEW DELHI: In what could trigger of rivalry between the warring siblings, Mukesh Ambani-owned Reliance Industries Limited (RIL) and leading gas distribution company Gas Authority of India Limited (GAIL) have sought licences for city gas distribution (CGD) and Compressed Natural Gas (CNG) projects in 58 cities across the country. Official sources said that both RIL and GAIL, through their wholly-owned subsidiaries, Reliance Gas Corporation and GAIL Gas, have submitted expression of interest (EoI) to the Petroleum and Natural Gas Regulatory Board for major cities such as Chennai, Bangalore, Hyderabad, Kolkata, Jhansi and Sonepat. Interestingly, Anil Ambani-owned Reliance Natural Resources Limited (RNRL) had last year submitted an application to the PNGRB for licence to set up CGD projects in Delhi and National Capital Region. Both RIL and GAIL had last year entered into an agreement for setting up of CGD projects and taking up other oil and gas related activities. The project for setting up the gas infrastructure in all these cities would entail an investment of around Rs. 48,000 crore over the next five years. Reliance Gas Corporation has submitted EoIs for 54 cities while GAIL Gas has shown interest in eight cities. Except for two cities, Ghaziabad in Uttar Pradesh and Gwalior in Madhya Pradesh, there are no overlapping bids by the two companies. According to the regulations for city gas distribution approved by the regulatory board in March this year, licences for all the 60 cities will now be put up for bidding. The successful bidder will eventually get the right to lay pipeline networks and retail gas to households and vehicles in that particular city. This has ensured success for Reliance Gas Corporation and GAIL as both of them have natural gas supply mechanism in place. However, the same cannot be said about the Anil Ambani-owned group that is still engaged in a legal battle with his elder brother for securing source of gas.