GAIL (India) and Coal India have announced the formation of a joint venture to develop a coal-to-synthetic natural gas (SNG) project in the eastern coalfields. The initiative will be undertaken through a newly established subsidiary named Coal Gas India.

Both state-owned Maharatna companies disclosed the development through separate exchange filings on 25 March. Coal Gas India Limited has been set up with an authorised share capital of Rs 110 million and an initial paid-up capital of Rs 1 lakh. Of this, Coal India has contributed Rs 51,000, while GAIL has contributed Rs 49,000.

The Ministry of Corporate Affairs has issued the certificate of incorporation for Coal Gas India, formally registering the entity under Indian corporate laws. The shareholding structure reflects Coal India’s majority stake with 5,100 equity shares, each valued at Rs 10, and GAIL’s holding of 4,900 equity shares of the same value. This gives Coal India a 51 per cent ownership in the joint venture, with GAIL holding the remaining 49 per cent.

The primary objective of the joint venture is to implement the coal-to-SNG project and facilitate the utilisation of the synthetic gas produced, aligned with prevailing market conditions. This project is expected to contribute to India's energy diversification efforts and reduce reliance on traditional fossil fuels.

On the day of the announcement, share prices of both companies declined. Coal India's stock dropped by 1.84 per cent, closing at Rs 398.40, marking its second consecutive day of losses. Meanwhile, GAIL India’s share price fell by 2.07 per cent to Rs 177.55, ending its five-day winning streak.

News source: Business World