Petronet LNG has signed a binding term sheet with Gruner Renewable Energy to set up a 50:50 joint venture that will build compressed biogas plants across India. The estimated capital outlay is ₹1,200 crore.
Key takeaways
- Petronet LNG signed a binding term sheet on 22 October with Gruner Renewable Energy Private Ltd, according to its exchange filing.
- The joint venture will set up 10 compressed biogas (CBG) plants across India, each with a capacity of 18 metric tonnes per day.
- The estimated capital outlay is ₹1,200 crore.
- Both partners will hold equal equity stakes, and board representation will follow shareholding.
Petronet LNG is stepping into the compressed biogas business, and it is doing so with a partner rather than on its own.
What the two companies have agreed?
On 22 October, Petronet LNG signed a binding term sheet with Gruner Renewable Energy Private Ltd. The document lays out the terms for a 50:50 joint venture dedicated to setting up CBG plants across India. Petronet disclosed the development in a filing with the stock exchanges.
A term sheet is not the same as a finished company. Under the proposal, the venture will be incorporated as a private limited company, with Petronet LNG and Gruner Renewable Energy each holding equal equity. That step is still to come.
The plan in numbers
According to the filing, the proposed venture will:
- Establish 10 CBG plants across the country
- Give each plant a capacity of 18 metric tonnes per day
- Involve an estimated capital outlay of ₹1,200 crore
Put together, the ten plants would add up to 180 tonnes of CBG capacity per day. Spread evenly, the outlay works out to about ₹120 crore per plant. Both figures are simple calculations from the announced numbers, not figures the companies have stated.
What the joint venture will actually do?
The filing describes a wide scope that covers the whole chain, from raw material to sale. The proposed business includes:
- Procuring feedstock
- Producing, manufacturing and processing CBG
- Compression, distribution, storage and transportation
- Supply, trading and sale of CBG
The venture will also handle associated by-products, along with the development, establishment, operation, maintenance and commissioning of CBG plants.
Governance
Representation on the joint venture’s board of directors will be proportional to each partner’s equity shareholding, according to the filing. With equal stakes, that points to balanced representation on the board.
Room to expand
The filing also notes that the joint venture may explore other business opportunities related to bioenergy. It does not name specific projects, so for now, CBG remains the clear focus.
What is still unclear?
The filing, as described in the source, does not state where the 10 plants will be located, which feedstock they will use, how the ₹1,200 crore will be funded, or when the plants are expected to start operating. Those details will matter for judging how quickly the plan can turn into output.
Why it matters?
The announcement shows a gas-sector company putting real money behind biogas through a partnership. Splitting ownership equally and sharing board control spreads the risk and the decision-making between the two firms. The next milestones to watch are the incorporation of the joint venture and the first plant locations.
Frequently asked questions
What has Petronet LNG announced?
- Petronet LNG has signed a binding term sheet with Gruner Renewable Energy Private Ltd to form a 50:50 joint venture for setting up compressed biogas plants across India.
How much will the joint venture invest?
- The estimated capital outlay is ₹1,200 crore.
How many plants will be built, and how large will they be?
- The venture plans 10 CBG plants across India, each with a capacity of 18 metric tonnes per day.
What is CBG?
- CBG stands for compressed biogas, which is biogas that has been processed and compressed so it can be stored, transported and sold.
Has the joint venture already been formed?
- Not yet. The binding term sheet was signed on 22 October, and the joint venture is to be incorporated as a private limited company, with both partners holding equal equity stakes.
