Assam Gas (AGCL), owned by the Government of Assam, and Oil India (OIL) have agreed to form a joint venture (JV) for distribution of piped natural gas, The Economic Times reported.

The JV aims to build local natural gas grids and operate natural gas distribution networks in six districts in Assam and in the neighbouring state of Tripura.

The natural gas will be supplied to both domestic and commercial consumers across Biswanath Chariali, Dhemaji, Darrang, Lakhimpur, Sonitpur and Udalguri districts in Assam along with few districts in Tripura, currently.

There are plans in place to set up compressed natural gas (CNG) stations as well.

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Assam Gas will have a 51% holding in the JV while the remaining 49% stake will be held by Oil India, a Government of India undertaking.

The JV is expected to have an authorised share capital of INR5bn ($61.17m) and an initial paid-up capital of INR1bn ($12.23m).

Assam Chief Minister Himanta Biswa Sarma stated that the JV agreement will provide a major boost to the ongoing industrial development process in the state.

He also opined that the move would support the state’s shift towards a greener fuel-based economy in line with the Northeast Hydrocarbon Vision 2030.

Besides, he appreciated Oil India’s management for reinvesting a part of its income within the state and other regions of Northeast via initiatives including the JV.