New Delhi: GAIL India Limited will pick up 10 per cent equity stake in the proposed 1000mw-Doraha gas-based Punjab Electricity Board (PSEB) power plant. The plant is to be set up at Doraha, near Ludhiana in Punjab.

GAIL (India) Limited and the Punjab State Electricity Board have recently signed a heads of agreement (HOA) for the supply of 4.5mmscmd (million metric standard cubic meters per day) of natural gas for the proposed mega power project. The project is likely to be commissioned by 2008-09 at an estimated cost of Rs3,500 crore.

In order to meet the demands of the proposed power plant in Doraha and other allied industrial, agricultural, transport and domestic sectors along the line, GAIL will be required to extend its Dadri-Panipat gas pipeline to Ludhiana, being taken up for implementation. Apart from the Doraha power plant, the existing and new fertiliser plants will provide the anchor load for gas and other industrial and agro sectors. The retail gas markets in the catchment area of the pipeline will provide the secondary load.

The ministry of petroleum and natural gas has cleared the proposal received from Punjab CM, conveying GAIL''s participation of up to 10 per cent stake in the proposed JV project with PSEB.

This will be the second power project in which GAIL will take equity participation. GAIL already has a 12 per cent equity stake in Gujarat State Energy Generation Limited''s 156mw power plant at Hazira.