GAIL (India) Limited , a Maharatna company under the Government of India, has made a strategic move in the renewable energy sector by signing a Share Subscription cum Shareholders Agreement with TruAlt Bioenergy Limited. The agreement secures GAIL a 49% equity stake in Leafiniti Bioenergy Private Limited (LBPL), a company set to spearhead new Compressed Bio Gas (CBG) projects.

Partnership Details

The partnership between GAIL and TruAlt Bioenergy aims to establish and operate new Compressed Bio Gas projects through LBPL. Currently a wholly-owned subsidiary of TruAlt Bioenergy, LBPL's ownership structure will shift to a 51:49 split between TruAlt Bioenergy and GAIL, respectively, upon completion of necessary conditions and approval from the Department of Investment and Public Asset Management (DIPAM).

Governance Structure

The agreement outlines a balanced governance structure for LBPL:

• A four-member board with equal representation from both parties
• Rotating chairmanship every three years, with GAIL nominating the first chairman
• GAIL to appoint the Chief Financial Officer
• TruAlt Bioenergy to nominate the Chief Executive Officer

Key Agreement Terms

GAIL has secured several strategic rights in the agreement:

1. First right to participate in fresh share issuances
2. Affirmative voting rights on changes to LBPL's capital structure
3. Right of First Refusal on equity sales by TruAlt Bioenergy
4. Tag-along rights in case of equity sale by TruAlt Bioenergy

The agreement also includes a lock-in period of 5 years from the closing date or 3 years from the commissioning of 6 CBG projects, whichever comes earlier.

Implications for the Bio Gas Sector

This partnership marks a significant step in India's push towards sustainable energy solutions. Compressed Bio Gas, produced from organic waste, presents a promising alternative to traditional fossil fuels. GAIL's involvement in this venture aligns with the country's efforts to reduce dependence on imported energy and promote cleaner fuel alternatives.

The collaboration between GAIL, a state-owned entity, and TruAlt Bioenergy, a private player, exemplifies the growing public-private partnerships in India's energy sector. This joint venture is poised to accelerate the development and adoption of CBG technology, potentially creating new opportunities in the renewable energy landscape.

As the project progresses, industry observers will be keen to see how this partnership influences the broader adoption of bio gas technologies and contributes to India's renewable energy targets.

GAIL (India) Limited , the country's largest gas transmission and distribution company, reported a net profit of ₹1,886.00 crore for the first quarter, down from ₹2,724.00 crore in the same period last year. The company's revenue from operations stood at ₹34,792.00 crore, showing a modest increase from ₹33,692.00 crore in the corresponding quarter of the previous year.

Financial Performance

Despite the year-on-year decline in profit, GAIL showed quarter-on-quarter improvement. Compared to the previous quarter, the company's net profit decreased from ₹2,049.00 crore to ₹1,886.00 crore. The revenue, however, saw a slight dip from ₹35,707.00 crore in the previous quarter.

On a consolidated basis, GAIL reported a net profit of ₹2,369.00 crore and revenue of ₹35,429.00 crore for the quarter.

Operational Highlights

GAIL's natural gas transmission volume stood at 121 MMSCMD (million metric standard cubic meters per day), while its marketing volume was 105 MMSCMD. The company also reported sales of 177 TMT (thousand metric tonnes) of petrochemicals and 198 TMT of liquid hydrocarbons during the quarter.

Capital Expenditure and Future Projects

Sandeep Kumar Gupta, Chairman & Managing Director of GAIL, stated that the company incurred a capital expenditure of approximately ₹3,176.00 crore during the quarter, primarily focusing on pipelines, petrochemicals, and equity contributions to joint ventures.

Gupta also announced that GAIL has received authorization from the Petroleum and Natural Gas Regulatory Board (PNGRB) for the capacity expansion of the Jamnagar-Loni LPG pipeline. The project, estimated to cost around ₹5,000.00 crore, will double the pipeline's capacity from 3.25 MMTPA to 6.5 MMTPA and is expected to be completed within three years.

Joint Venture with Rajasthan Power Utility

In a significant development, GAIL has entered into a joint venture agreement with Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUNL). The 50-50 partnership aims to transfer existing gas-based power plants totaling 600.5 MW to the joint venture company and develop approximately 1,000 MW of renewable energy projects in Rajasthan.

Key points of the joint venture include:

• Transfer of 330 MW gas-based power plant in Dholpur and 270.5 MW plant in Ramgarh to the JV company, subject to due diligence by GAIL
• Development of about 750 MW of solar projects and 250 MW of wind power projects
• Initial authorized and paid-up share capital of ₹10.00 lakh
• Equal board representation with three directors each from GAIL and RVUNL
• A five-year lock-in period for the partnership

This strategic move aligns with GAIL's efforts to diversify its energy portfolio and contribute to India's renewable energy goals.

Sustainability Recognition

GAIL has been included in the FTSE4Good Index series for the seventh consecutive year, underscoring the company's commitment to sustainability and strong Environmental, Social, and Governance (ESG) performance.

As GAIL continues to navigate the evolving energy landscape, its focus on expanding infrastructure, venturing into renewable energy, and maintaining strong financial performance positions it well for future growth in India's gas and energy markets.