New Delhi: GAIL (India) Limited and Indian Oil Corporation Limited (IOC) signed a joint venture in New Delhi yesterday for jointly implementing the city gas projects in Agra and Lucknow. The agreement was signed by Proshanto Banerjee, chairman and managing director, GAIL and Sarthak Behuria, chairman, IndianOil.

The ministry of petroleum and natural gas has allocated 0.1 MMSCMD of natural gas for the city gas project at Lucknow. The signing of the agreement has cleared the way for the formation of a JV company to supply piped natural gas (PNG) and compressed natural gas (CNG) to the two cities, with GAIL having made a commitment to the Environment Pollution & Control Authority (EPCA) to ensure supplies by December 2005. The use of natural gas in the automotive and domestic sectors will reduce the environmental pollution in these cities.

Describing the occasion as "historic", Banerjee, said, "The JV agreement for the city gas projects in Agra and Lucknow would give an added momentum to GAIL''s project ''blue sky'' aimed at reducing environment pollution in the country." He expressed the hope that consumers would stand to benefit from the combination of the retail marketing strength of IOC and the natural gas transmission and city gas distribution expertise of GAIL.

Behuria added, "This new agreement is yet another step forward towards realising our vision to reach a $60-billion revenues by 2011 from $35 billion at present. As the leader of the downstream industry, IndianOil is leveraging its current position to emerge as a gas supplier of the same stature as liquid fuel supplier. Our interests in LNG and CNG are driven by this business vision."

Initially, the joint venture company will supply natural gas to 1,000 domestic, 20 commercial and 16,600 automobile consumers in Agra and will supply natural gas to 1,000 domestic, 62 commercial and 1950 automobile consumers in Lucknow. The proposed joint venture company will set up seven CNG stations in Agra and two in Lucknow, in a phased manner.

So far city gas distribution projects have been implemented in Delhi and Mumbai under joint venture operations for supplying PNG and CNG to retail customers, including domestic, commercial, industrial and automobiles while adjacent cities like NOIDA, Gurgaon, Faridabad, Thane and Navi Mumbai will also be covered.

Lucknow, Agra and Kanpur, which are close to the HVJ pipeline, like are being covered in this plan, while Pune, Varanasi, Patna, Kolkata, Hyderabad and Ahmedabad, where transmission pipelines are coming up, will also have the facility besides Sholapur where CNG will be supplied through cascades.

CNG projects are also being planned for Indore, Kota, Vijayawada, Rajahmundry, Rajkot, Surendranagar, Gwalior, among others.