Indraprastha Gas, Mahanagar Gas, GAIL, Compressed natural gas, NSE:IGL from

Indraprastha Gas, Mahanagar Gas to join hands for CGD project in MP

IGL, MGL to bid jointly for licence to market CNG, PNG in Rewa, Singrauli districts

Indraprastha Gas Ltd (IGL) and Mahanagar Gas Ltd (MGL) are likely to come together to bid for a city gas distribution (CGD) project in Madhya Pradesh. The two companies are in talks to form a joint venture (JV) to bid for the licence to market CNG and PNG in Rewa and Singrauli districts.

Sources close to the development said that the JV is likely to be formed in the next few weeks. IGL and MGL are both subsidiaries of GAIL (India) Ltd, the country's largest gas transmission and marketing company.

The CGD project in Rewa and Singrauli districts is part of the government's plan to expand the reach of natural gas across the country. The project is expected to attract investment of around Rs 400 crore.

IGL, which is the largest CGD company in the country, currently operates in Delhi, Noida, Greater Noida, Ghaziabad and Muzaffarnagar. MGL, on the other hand, operates in Mumbai and its suburbs.

The JV between IGL and MGL will be the first time that two CGD companies have come together to bid for a project. The move is significant as it could lead to consolidation in the CGD sector.

Sources said that the JV is likely to bid for the CGD project in Rewa and Singrauli districts through a special purpose vehicle (SPV). The SPV will be owned equally by IGL and MGL.

The JV is expected to face competition from other CGD companies, including Gujarat Gas Ltd, Adani Gas Ltd and Torrent Gas Ltd.

The government is expected to issue the tender for the CGD project in Rewa and Singrauli districts in the next few months. The project is expected to be awarded by the end of the year.