GSPC arm to raise Rs 400 cr for gas distribution projects

AHMEDABAD: GSPC Gas, a subsidiary of the state-owned Gujarat State Petroleum Corporation (GSPC), is set to raise Rs 400 crore as term loans from four Indian banks to execute the city gas distribution projects in various cities of the state.The company will sign a definitive agreement with the banks by the end of the month.

As much as Rs 100 crore will be raised from each of the four banks, including the State Bank of India and IDBI Bank. The funds will then be used for various city gas distribution projects to be commissioned by 2009.

GSPC is simultaneously exploring opportunities of having a strategic partner or equity investor for raising funds. ���The funds will be used in various city gas projects,��� sources in the company told ET. The company already supplies city gas in the state capital Gandhinagar and has plans to extend its network to other cities like Valsad, Vapi, Rajkot, Morbi, Nadiad and Navsari.

These cities are getting ready to be part of the state���s gas grid network. The Rs 367-crore Anand-Rajkot-Morbi grid was recently commissioned while the pipeline in south Gujarat is to be completed soon.

For strategic partnership, the company is currently in talks with Indian Oil Corporation and Bharat Petroleum Corporation while it is in talks with a few financial institutions for equity participation.

The company will have to tie up the gas supplies before commissioning of the city gas projects. The company would hope to use the gas from GSPC���s Deen Dayal block for the city gas projects. The block in the KG basin is likely to be commissioned by 2009 and the company is currently in the process of drilling exploratory wells in the basin.