Stock update: GAIL

Stock update: GAIL

Kerala State Industrial Development Corporation Limited (KSIDC) and GAIL (India) Limited signed an MoU on Monday for natural gas infrastructure and city gas distribution (CGD) in Thiruvananthpuram.

The two organizations will initiate a joint exercise for the immediate assessment of the demand potential of natural gas and allied products in the state. Besides, the cooperation is based on the strategy of awareness, prevention and implementation, to work towards the goal of a green environment.

The MoU also envisages to identify industrial clusters for the distribution of natural gas as a fuel, and to determine the modus operandi for the setting up of joint ventures by GAIL in Kerala.

The GAIL board has also approved the laying of the 1,114 km Kochi–Kanjikkod– Mangalore-Bengaluru pipeline, at an estimated investment of Rs3,032 crore. The project will be implemented in two phases.

In Phase I, the company will lay a 94km pipeline from Kochi to Alwaye, covering Udyogmandal, Binannipuram and Ambalamedu, at an investment of Rs267.5crore. Phase I is scheduled to be completed by 2011-12.

In Phase II, it will lay a 1,018km pipeline from Alwaye to Kanjikkod, Kanjikkod to Mangalore, and Kanjikkod to Palakkad, covering Thrissur, Kottakal, Kozhikode, Kannur, Mangalore and Palakkad.

The project will involve the laying of pipelines from Palakkad to Bengaluru, covering Coimbatore and Salem. Phase II, at Rs2,764.5crore, is scheduled to be completed by 2012-13. We remain NEUTRAL on GAIL.