Gas retail JV partner wanted for Vadodara council

Vol 13, PW 8 (24 Sep 09) Midstream & Downstream

Vadodara Municipal Corporation (VMC) is looking for a joint venture partner to scale up its 39-year old gas distribution business in Vadodara, a city known for its magnificent palaces and as the former seat of the Gaekwad rulers of Gujarat.

PETROWATCH learns VMC finally received permission to form a joint venture with a â€کprofessional gas company’ in the first week of September from Gujarat urban development minister Nitin Patel during a meeting held with a team led by VMC commissioner Manoj Kumar Das in Gandhinagar. “I am happy we can go ahead and form a joint venture,â€‌ Das later told PETROWATCH.

VMC first realised it needed a joint venture partner after carrying out a â€کSWOT’ (Strengths, Weaknesses, Opportunities and Tests) analysis of its CGD operations in 2007. Shortly after, it signed a JV agreement with supplier GAIL, but that agreement was cancelled for want of clearance from the Gujarat government.

Persistent, the VMC continued to press the state government for permission, and clearance has now come through. VMC is the first and only municipal council in India to operate a city gas business.

It started operations on July 19, 1972 and presently supplies 100,000cm/d to 74,000 connections in Vadodara city of which 71,500 are households and 2500 are commercial customers like restaurants and hotels. “We have a good pipeline network,â€‌ adds Das.

“But we want to expand and for that we need expertise and the resources of a professional company.â€‌ Das refuses to say if VMC would sign a new JV agreement with GAIL, but maintains he has started scouting for â€کthe best possible option.

’ GAIL is currently the sole gas supplier to VMC, selling on average 30,000-kg of CNG everyday from three VMC stations in Vadodara. GSPC Gas, the retail arm of GSPC, is the other main contender, but does not match GAIL’s formidable presence in the royal city.

So far neither has received anything in writing from VMC.