Shares of GAIL (India) Ltd surged by over 1% on Friday morning after the company announced the signing of a preliminary agreement with the Rajasthan government. The stock was trading 1.30% higher at ₹230.27 as of 9:20 AM.
Key Points of the Agreement
- Joint Venture Formation: GAIL has signed a pact with Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL) to explore forming a joint venture. This venture aims to optimize the operations of gas-based power plants in Rajasthan and establish 1,000 MW of solar and wind power projects.
- Optimizing Gas-Based Power Plants: The agreement focuses on potentially transferring RRVUNL’s gas-based power plants in Dholpur and Ramgarh, Rajasthan, to the proposed joint venture. These plants are heavy consumers of natural gas, offering GAIL a reliable customer for its gas supply.
- Renewable Energy Initiatives: In addition to gas-based power optimization, the agreement includes plans to set up 1,000 MW of solar and wind power projects on suitable land parcels, aiming to provide round-the-clock power.
- Due Diligence and Feasibility: GAIL and RRVUNL will conduct a detailed due diligence and feasibility study for each project before proceeding with the joint venture.
Strategic Importance
This partnership aligns with GAIL’s strategy to expand its customer base and invest in renewable energy. GAIL, being India’s top natural gas marketer and transporter, can leverage its extensive pipeline network to supply fuel to power plants and city gas areas across Rajasthan, including Kota, Bhilwara, Bhiwadi, Chittorgarh, and Jodhpur.
Market Reaction
Investors responded positively to the news, pushing GAIL’s shares up by 1.30% in early trading.
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GAIL