Jay Madhok Energy has been show-caused by the oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB) over defaulting on timelines and alleged irregularities in acquisition of the city gas licence.
"Adani Gas (AGL) has signed a definitive agreement for acquisition of three geographical areas (Gas) namely Ludhiana, Jalandhar and Kutch (East)," the firm said in a statement.
"All 3 GAs have high volumes potential in terms of demand of over 6.5 million standard cubic meters per day over a period 10 years. These GAs are under phase 1 of Bharat Mala Pariyojana by NHAI which will further boost the development and volume growth," it said.
Jay Madhok had in 2013 won the licence to retail CNG to automobiles and piped natural gas to households and industries in Jalandhar in Punjab; and two years later, it got a licence for Ludhiana in Punjab and Kutch (East) in Gujarat.
The three cities were bid out in the third city gas licensing round where the bidder offering to lay the longest length of gas pipeline and provide the most cooking gas connections got the licence.
But the firm, according to PNGRB, made little progress on its commitments. PNGRB in 2016 cancelled its licences. Jay Madhok challenged the cancellation in Appellate Tribunal which in April 2017 set aside the PNGRB order and asked the regulator to follow the set procedure for cancellation.
Since then, the matter is pending before PNGRB and the Jay Madhok had been seeking adjournments on one pretext or the other.
In March 2019, PNGRB issued another notice to Jay Madhok over alleged irregularities in the networth used to acquire the licence. PNGRB also alleged a fraud in the furnishing of a loan sanction letter from Deutsche Bank AG, Singapore.
Sources said PNGRB will now have to examine if a sale of licence is permissible under the statute and what happens to the default by the original licensor.
PNGRB can accord an approval if it reaches a conclusion that such a deal is in the best interest of the development of the licence.
With the acquisition, Adani Gas now has licence for 22 GAs. It has 19 more licences in a joint venture with state-owned Indian Oil Corp (IOC). These GAs cover 74 districts.
"Ludhiana and Jalandhar are twin cities of Punjab and are major industrial and commercial hubs with very high-volume potential of CNG and piped natural gas (PNG) homes. Both cities are in the vicinity of the pipeline connectivity," the company statement said.
Kutch (East) is poised to take centre stage for the industrial development in Gujarat.
"AGL has strong presence in Gujarat," it said adding Kutch (East) is well connected with pipeline and LNG terminal infrastructures making Kutch (East) an attractive destination for the development of CGD network.
Given the availability of pipeline connectivity in the surroundings, all the 3 GAs shall offer early monetisation opportunity to AGL.
"The transaction is subject to necessary regulatory and other customary approvals," the statement said.
Speaking on the occasion, Suresh P Manglani, CEO, Adani Gas said, "These 3 GAs offer high PNG and CNG volumes together with excellent infrastructure growth opportunities."
"This transformational acquisition shall allow AGL to supply cleaner fuels - PNG in fulfilling much awaited aspirations of large number of homes, commercial and industrial consumers, Gurudwara, hotels, restaurants and environmental friendly CNG to automotive consumers in Ludhiana, Jalandhar and Kutch (East) GAs.
This initiative by AGL shall further support the vision of central and state governments to provide PNG and CNG to all," he said.
He said Adani will aim to fast track the infrastructure developments across all these GAs.
"These 3 GAs shall add significant high volumes and infrastructure developments and will take AGL to a high growth trajectory.
With the strong parentage of AGL, the residents of Ludhiana, Jalandhar and Kutch (East) shall also be beneficiary of best in class CGD networks, operations, maintenance, digital and customer centric approach with continued focus on health and safety, community development and better returns to the stakeholders," he added.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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