GAIL (India) Ltd and Hindustan Petroleum Corporation Ltd will be forging a third front under the public sector fold for scouting upstream business abroad.
The two companies signed memorandum of understandings for joint collaboration for upstream activities and city gas distribution projects.
The upstream alliance will now be asking the government for power on the lines of ONGC Videsh Ltd. Addressing to GAIL and HPCL will identify and evaluate exploration and production opportunities in India, West Asia, south-east Asia, east and west Africa, Australia, Russia and some former Soviet block republics.
The two companies also plan to bid for oil and gas blocks in the country under the subsequent rounds of the New Exploration and Licensing Policy, besides bidding for coal bed methane blocks.
They also signed an MoU to set up joint venture companies for city gas projects in Madhya Pradesh, Rajasthan and Gujarat. A team, comprising officials from both companies, has been set up to evaluate the various projects.
In city gas distribution, HPCL and GAIL will hold 22.5 per cent stake each, while 5 per cent will be held by the state governments. Financial institutions and the public will hold the remaining stake.
In Madhya Pradesh, city gas projects will start initially in Indore, Gwalior and Ujjain. In Rajasthan, the gas project will be started in Kota.
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