Corporate Development     

Published: January 31, 2024
Updated: January 31, 2024

GAIL

$ 72 mn JV to produce biogas

GAIL and TruAlt Bioenergy have announced a $ 72 million investment through a CBG (compressed bio gas) joint venture to set up 10 plants with an estimated production of over 33 million kg.

GAIL, the country’s largest natural gas company, and TruAlt Bioenergy Limited, the largest producer of ethanol in India, have signed a term sheet for GAIL’s equity participation in TruAlt’s joint venture company, Leafinti Bioenergy Limited, which owns and operates India’s second CBG plant.

The shareholding of TruAlt Bioenergy and GAIL in the JV would be 51% and 49% respectively. The investment in setting up the CBG plants will exceed over $72 million and will be funded through a combination of debt and equity. However, this will be subject to a favourable outcome of due diligence and requisite approvals.

GAS VIA WASTE

The JV company will process over 600 million kg of organic waste like agricultural residue, sugarcane press mud, spent wash (waste generated during ethanol production) and other decomposable waste per annum, to produce over 33 million kg of CBG, nearly 20 million kg of solid fermented organic manure (SFOM) and over 30 million kg of liquid fermented organic manure (LFOM) per annum.

Each unit will have a capacity of 10,000 kg per day (TPD), resulting in a daily production of 100,000 kg of CBG.

A significant boost to the local and agrarian economies will result in employment opportunities for over 600 individuals while simultaneously providing immense ecological benefits. The JV aims to create a robust ecosystem for the production of CBG from diverse waste and biomass sources alongside the growing potential of CNG.

TruAlt Bioenergy, through its wholly owned subsidiary Leafiniti Bioenergy, owns and operates India’s second CBG plant that was established under the Sustainable Alternative Toward Affordable Transportation (SATAT) scheme in 2021.

Incorporated in March 2021, TruAlt is the largest supplier of ethanol in India, with a marketshare of 70.6% in FY23, and operates 3 distilleries in Karnataka which have an aggregate installed capacity of 1,400 klpd as of September 30, 2023.

‘CLEAN’ GAS

Speaking on the occasion, Rajeev Kumar Singhal, Director (Business Development), GAIL, said, “CBG has emerged as a viable alternative to imported fossil natural gas. The signing of the term sheet is a step in the right direction, considering the emphasis on cleaner and greener fuel and the vision of ‘Atmanirbhar Bharat’.”

On the establishment of the partnership, Vijay Nirani, founder and Managing Director, TruAlt Bioenergy, said, “We have been spearheading the production of ethanol and various other biofuels since 2012. With the immense support of the government of India in creating bio fuel-based economy, TruAlt Bioenergy has emerged as one of the leading bioenergy companies and also one of the largest contributors to India’s landmark Ethanol Blended Petrol (EBP) programme. Through this partnership, we aim to create a robust ecosystem for CBG in India, allowing for a smooth transition to economical and ecological sources of energy.”

Subhransu Sekhar Biswal, Director, Leafinti Bioenergy, said, “This is indeed an important milestone for us and will revolutionize the bioenergy landscape. Other than biogas, the plants will also yield fermented organic manure which can be used for organic farming and can contribute to sustainable agriculture practices. This venture is expected to employ over 600 people.”

BENEFITS OF CBG

India is advancing in CBG production, offering solutions for reduced gas imports, lower emissions, and effective waste management. The government aims to achieve a 15% gas share in the energy mix by 2030, emphasizing a shift to a gas-based economy. India is targeting 5,000 commercial CBG plants by 2023-24, producing 15 million metric tonnes (mmt), to replace other gaseous fuels and enhance energy sustainability. The comprehensive approach exhibits India’s commitment to renewable energy, environmental responsibility, and economic growth.

GAIL has diversified interests across the natural gas value chain of trading, transmission, LPG production & transmission, LNG re—gasification, petrochemicals, city gas, E&P, etc. It owns and operates a network of over 16,000 km of natural gas pipelines spread across the length and breadth of the country. It is also working concurrently on execution of multiple pipeline projects to further enhance its network.

GAIL commands around 70% marketshare in gas transmission and has a gas trading share of over 50% in India. GAIL and its subsidiaries/JV s also have a formidable market share in City Gas Distribution. In the liquefied natural gas (LNG) market, GAIL has a significantly large portfolio. It is also expanding its presence in renewable energy like solar, wind and biofuel.