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.
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