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GAIL plans to set up 26 Bio CNG plants

GAIL (India) Ltd. plans to establish around 26 Bio CNG plants over the next two to three years, both as producers and in joint ventures with raw material suppliers or biogas producers. The company has issued an Expression of Interest across India for companies meeting specific criteria to form joint ventures for raw materials such as paddy straw, municipal solid waste, and sugarcane press muds, reported NDTV profit.

Praveer Kumar Agarwal, executive director of GAIL said, “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).”

The company then “socialises the cost” by blending it with pooled gas to reduce the selling price to less than half, Agarwal explained. This synchronisation plan has been highly successful with biogas producers across India.

As per media report, GAIL and its joint venture partners are expected to invest up to Rs 1,300 crore, including equity contributions of 30%. “Each plant, depending on its capacity of 5 to 10 tonnes per day, will cost between Rs 30 crore and Rs 50 crore, leading to an investment of Rs 1,300 crore over the next two to three years,” Agarwal added.

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