Thiruvananthapuram, Sep 14 - Kerala State Industrial Development Corp (KSIDC), the investment promotion agency of the state government, has tied up with Gas Authority of India Ltd (GAIL) for developing gas pipeline infrastructure.

The partnership will lead to attracting investments to the tune of Rs.8,500 crore in the state, officials said.

The agreement was signed by KSIDC managing director Alkesh Sharma and GAIL executive director (marketing) J. Wason in the presence of Chief Minister V.S. Achuthanandan.

According to the agreement, GAIL will invest Rs.4,500 crore to develop the gas pipeline to transport regasified LNG from a terminal being developed by Petronet in Kochi to other areas as well as promote city gas distribution projects.

Petronet LNG, a joint venture of state-run energy companies, is investing Rs.4,000 crore to set up the Kochi terminal.

The project will have a capacity of 2.5 million tonne per annum initially, which will be expanded to 5 million tonnes. The project is expected to be commissioned by 2012.

The terminal and pipeline projects, according to state officials, will lead to the massive industrialisation of the the state.