GAIL To Set Up 26 Bio CNG Plants In JV Partnership

GAIL (India) Ltd. plans to set up around 26 Bio CNG plants over the next two to three years, both as producers as well as joint venture partners with raw material suppliers or biogas producers.

The company has issued an Expression of Interest across India, for companies qualifying with certain parameters to form joint ventures for raw materials such as paddy straw, municipal solid waste and sugarcane press muds.

“We have issued Letter of Intent to the gas producers and have entered into agreements with large biogas producers such as Adani and Reliance Industries Ltd. to buy their entire biogas produce at very high price of $15-$16 per million metric British thermal unit (mmBtu),” Praveer Kumar Agarwal, executive director of GAIL, told NDTV Profit.

The company then "socialises the cost" by mixing it with pooled gas to bring down the selling price to less than half, Agarwal said. The synchronisation plan has become a big hit with biogas producers across India, he said.

The company alongwith joint venture partners is likely to invest up to Rs 1,300 crore, including equity contributions of 30%.

“Each plant—depending on the capacity of 5 tonne per day to 10 tonne per day—will cost between Rs 30 crore to Rs 50 crore. That would entail an investment of Rs 1,300 crore over the next two to three years by the entities,” Agarwal said.